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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 6-K

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

Dated April 2, 2013
Commission file number 001-15254




ENBRIDGE INC.
(Exact name of Registrant as specified in its charter)

Canada
(State or other jurisdiction
of incorporation or organization)

  None
(I.R.S. Employer Identification No.)


3000, 425 - 1st Street S.W.
Calgary, Alberta, Canada T2P 3L8
(Address of principal executive offices and postal code)


(403) 231-3900
(Registrants telephone number, including area code)




Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F

  o   Form 40-F   ý

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes

  o   No   ý

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by regulation S-T Rule 101(b)(7):

Yes

  o   No   ý

   


Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes

  o   No   ý

If "Yes" is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b):

N/A

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM S-8 (FILE NO. 333-145236, 333-127265, 333-13456, 333-97305 AND 333-6436), FORM F-3 (FILE NO. 333-185591 AND 33-77022) AND FORM F-10 (FILE NO. 333-181333) OF ENBRIDGE INC. AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

The following documents are being submitted herewith:

1.
Notice of Meeting and Management Information Circular;

2.
Form of Proxy; and

3.
Annual Report for the year ended December 31, 2012.


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  ENBRIDGE INC.
(Registrant)

Date: April 2, 2013

       

 

By:

 

/s/ ALISON T. LOVE


Alison T. Love
Vice President & Corporate Secretary

GRAPHIC


Contents

Letter to shareholders   1
Notice of our 2013 annual meeting of shareholders   2
Management information circular   3
 
1. About the meeting

 

4
  What the meeting will cover   4
  Who can vote   4
  How to vote   5
  Electing our directors   7
  Appointing our auditors   18
  Having a "Say on pay"   20
  Shareholder proposals   20
 
2. Governance

 

21
  Our governance practices   21
  A culture of ethical conduct   21
  The role of the board   23
  Our expectations of our directors   25
  Board evaluation   27
  Board committees   28
 
3. Compensation

 

36
  Directors   36
    Compensation discussion and analysis   36
    2012 results   38
  Executives   41
    Compensation discussion and analysis   41
    2012 results   70
 
4. Loans to directors and senior officers

 

78
 
5. Directors' and officers' liability insurance

 

78

GRAPHIC

March 5, 2013

Dear shareholder

It is our pleasure to invite you to attend the Enbridge Inc. annual meeting of shareholders on May 8, 2013 at the Metropolitan Conference Centre, Ballroom in Calgary.

This meeting is your opportunity to vote on the items of business, hear about our performance over the past year and learn more about our plans for making sure Enbridge Inc. remains one of your most valued investments.

You will also be able to meet the Board of Directors and senior management and talk to other Enbridge Inc. shareholders.

This document includes a formal notice of the meeting and the management information circular, which explains what the meeting will cover, the voting process, governance and other important information, such as how we make our compensation decisions and why. The package you received also includes either a brief summary about Enbridge Inc. or our full 2012 annual report, if you asked us to send it to you.

It's important to vote. Please take some time to review this document and then vote your common shares, either by proxy or by attending the meeting in person.

Sincerely,



 

David A. Arledge
Chair, Board of Directors
  Al Monaco
President & Chief Executive Officer

1      ENBRIDGE INC.


GRAPHIC

Notice of our 2013 annual meeting of shareholders

You are invited to the Enbridge Inc. 2013 annual meeting of shareholders.

When

May 8, 2013
1:30 p.m. (mountain daylight time) (
MDT)

Where

Metropolitan Conference Centre, Ballroom
333-4th Avenue S.W.
Calgary, Alberta (Canada)

Your vote is important

Please remember to vote your common shares. If you held Enbridge Inc. common shares at the close of business on March 14, 2013 you are entitled to receive notice of this meeting or any adjournment of it and vote your common shares.

The Board of Directors has approved the contents of this circular and has authorized us to send it to you. It has also given us approval to send it to our auditors.

By order of the Board,

LOGO

Alison T. Love
Vice President & Corporate Secretary

Calgary, Alberta
March 5, 2013

2013 Management information circular      2


GRAPHIC

Management information circular

You have received this management information circular (circular) because you owned Enbridge common shares (Enbridge shares or common shares) at the close of business on March 14, 2013 (record date).

As a shareholder, you have the right to attend our annual meeting (meeting) of shareholders on May 8, 2013 and to vote your Enbridge shares. You can vote in person or by proxy, using the enclosed form.



ABOUT THIS DOCUMENT

This circular is furnished in connection with the solicitation of proxies by and on behalf of the management of Enbridge for use at the meeting and any adjournment of the meeting.

This circular explains what the meeting will cover, the voting process and other important information you need to know, such as:
  the directors who have been nominated to our Board of Directors (Board or Board of Directors);
  the auditors;
  our governance practices; and
  2012 compensation for our directors and officers.

 




In this document,
you and your mean holders of Enbridge common shares.

We, us, our, company and Enbridge mean Enbridge Inc.

All dollar amounts are in Canadian dollars (
$ or CA$) unless stated otherwise. US$ means United States of America (US) dollars.


VOTING

It's important to vote your Enbridge shares. To encourage you to vote, Enbridge employees may contact you in person or by phone. We pay for the cost of soliciting your vote and our employees do not receive a commission or any other form of compensation for it.

ACCESSING DOCUMENTS

You will find important disclosure and governance documents on our website (www.enbridge.com), including our quarterly and annual management's discussion and analysis (MD&A) and financial statements and notes, 2012 annual report, annual information form for the year ended December 31, 2012 and this circular. Copies are also available free of charge from our Corporate Secretary by phone, fax or email.

T. 1.403.231.3900
F. 1.403.231.5929
email: corporatesecretary@enbridge.com

You can also find these and other documents on SEDAR (www.sedar.com).

COMMUNICATING WITH THE BOARD

You can write to our Board or to individual directors by contacting our Corporate Secretary:

Alison T. Love, Vice President & Corporate Secretary
Enbridge Inc.
3000, 425 – 1st Street S.W.,
Calgary, Alberta, Canada T2P 3L8
email: corporatesecretary@enbridge.com

Our head office is also our principal executive and registered office.

This circular and proxy form will be mailed to shareholders on or close to April 2, 2013. Unless we state otherwise, information in this circular is as of March 5, 2013.

3      ENBRIDGE INC.


1.        About the meeting


WHAT THE MEETING WILL COVER

There will be four items of business:

Financial statements(www.enbridge.com/InvestorRelations)

You will receive our 2012 consolidated financial statements and the auditors' report. You can download a copy of our 2012 annual report from our website (www.enbridge.com) if you did not receive a copy with this package.

Directors (see page 7)

You will elect directors to our Board of Directors for a term of one year. You can read about the nominated directors, including their backgrounds, experience and the committees of the Board (
Board Committees or any one, a committee) they sit on, starting on page 8.

 




Live audio webcast

We are broadcasting a live audio webcast of our 2013 meeting if you're unable to attend in person.


Be sure to check our website closer to the meeting date for details.


We will also post a recording of the meeting on our website after we hold it.


Auditors (see page 18)

You will vote on reappointing the auditors. Representatives of PricewaterhouseCoopers LLP (PwC) will be at the meeting to answer any questions. You can read about the services they provided in 2012 and the fees we paid them starting on page 19.

Having a "say on pay" (advisory vote) (see page 20)

You may also vote on our approach to executive compensation. This is a non-binding advisory vote.

As of the date of this circular, the Board and management are not aware of any other items of business to be brought before the meeting.

We need a quorum

We need a quorum to hold the meeting and transact business. This means the people attending the meeting must hold or represent by proxy at least 25% of the total number of issued and outstanding common shares of Enbridge.

Sending of materials

We are not using what is referred to as "notice-and-access" to send this information circular and related materials to our shareholders for this meeting, nor are we sending these materials directly to non-objecting beneficial owners (NOBOs).

We are sending these materials directly to our registered shareholders and indirectly to all non-registered shareholders through their intermediaries. We will pay for an intermediary to deliver these materials and a voting instruction form to objecting beneficial owners (OBOs).

WHO CAN VOTE

Our authorized share capital consists of an unlimited number of Enbridge common shares and an unlimited number of non-voting preferred shares, issued in series. Only holders of common shares have full voting rights.

If you held common shares at the close of business on March 14, 2013 you are entitled to attend the meeting or any adjournment, and vote your common shares. Each Enbridge common share you hold represents one vote.

Principal owners of common shares

As of March 5, 2013, there are 809,283,814 common shares of Enbridge issued and outstanding. There are also 10 series of preference shares of Enbridge issued and outstanding, none of which will be voting at the meeting.

The Board and management are not aware of any shareholder who directly or indirectly owns or exercises or directs control over more than 10% of our common shares.

2013 Management information circular      4



HOW TO VOTE

You can attend the meeting and vote your common shares in person or you can vote by proxy.

Voting by proxy

Registered shareholders

You are a registered shareholder if you hold your common shares in your name (in such case, you have a share certificate).

Voting by proxy is the easiest way to vote. It means you are giving someone else the authority to attend the meeting and vote on your behalf (called your proxyholder).

Al Monaco (President & Chief Executive Officer) and David A. Arledge (Chair of the Board or Chair), have agreed to act as the Enbridge proxyholders. If you appoint the Enbridge proxyholders but do not indicate on the enclosed form how you want to vote your common shares, they will vote as the Board of Directors recommends:

for electing the nominated directors;
for re-appointing the auditors; and
for the advisory vote on our approach to executive compensation.

You can appoint someone else to be your proxyholder. This person does not need to be a shareholder. To do so, do not check the names of the Enbridge proxyholders on your proxy form. Instead, check the second box and print the name of the person you want to act on your behalf. Make sure the person you're appointing knows that you have appointed them as your proxyholder and that he or she needs to attend the meeting. Your proxyholder will need to register with our transfer agent when they arrive at the meeting.

Proxyholders must vote your common shares according to your instructions, including on any ballot that may be called. If there are changes to the items of business or new items properly come before the meeting, a proxyholder can vote as he or she sees fit.

About the registrar and transfer agent

The registrar and transfer agent for our shares is CIBC Mellon Trust Company (CIBC Mellon). Canadian Stock Transfer Company Inc. acts as the administrative agent for CIBC Mellon. To protect shareholder confidentiality, CIBC Mellon collects the votes and counts them for us.

Registered shareholders can vote by mail, phone, fax or online. Choose the method you prefer and then carefully follow the voting instructions on the enclosed form.

If you are voting by mail or fax, complete your proxy form, sign and date it, and then send it to Canadian Stock Transfer Company acting as administrative agent for CIBC Mellon:



Canadian Stock Transfer Company
P.O. Box 721
Agincourt, Ontario M1S 0A1
Fax: 1.866.781.3111 (toll-free in North America; outside of North America: 1.416.368.2502)

Canadian Stock Transfer Company must receive your instructions by 6 p.m. MDT on May 6, 2013
regardless of the voting method you choose. If the meeting is postponed or adjourned, your instructions must be received by 6 p.m. MDT two business days before the meeting is reconvened.

Proxy voting on the internet

If you are a registered shareholder, you can also appoint a proxyholder on the internet at www.proxypush.ca/enb (follow the onscreen instructions). Your proxyholder will need to register with our transfer agent at the meeting.

 




Hold common shares as both a registered and non-registered shareholder?

If some of your common shares are registered in your name and some are held by your nominee, you will need to follow two sets of voting instructions.

Please follow the instructions carefully. The voting process is different for registered and non-registered shareholders.


5      ENBRIDGE INC.


Non-registered shareholders

You are a non-registered (or beneficial) shareholder if your bank, trust company, securities broker, trustee or other financial institution (your nominee) holds your common shares for you in a nominee account. This means you do not have a physical share certificate but your common shares are recorded on the nominee's electronic system.

Only proxies deposited by registered shareholders can be recognized and acted upon at the meeting. If you are a beneficial shareholder, you will need to follow the voting instructions of your nominee.

Each nominee has its own voting instructions, but you can generally vote by mail, phone, fax or online. Carefully follow the instructions on the voting information form in the package sent to you by your nominee. Your nominee needs enough time to receive your instructions and then send them to our transfer agent, so it's important to complete the form right away.

Voting in person

Voting in person gives you the opportunity to meet face to face with management and interact with our Board.

Registered shareholders

If you are a registered shareholder and want to attend the meeting and vote in person, do not complete or return the enclosed proxy form. When you arrive at the meeting, please see a representative from CIBC Mellon to register.

Non-registered shareholders

If you are a beneficial shareholder and you want to attend the meeting and vote in person, your nominee needs to appoint you as proxyholder. We do not have a record of the number of common shares you own or how many votes they represent because your common shares are held in a nominee account and are not registered in your name. Print your name on the voting instruction form you received from your nominee and carefully follow the instructions provided. Do not indicate your voting instructions. Be sure to register with a representative from Broadridge Investor Communications Solutions when you arrive at the meeting.

All shareholders will be required to present photo identification to gain access to the meeting.

Changing your vote

If you vote by proxy, you can revoke or change your voting instructions, but we must receive your instructions to change or revoke your vote in time, or you can vote in person instead, as noted below.

Registered shareholders

If you voted online or by phone, submit new voting instructions. Your new instructions will revoke your earlier instructions.

If you voted online, you can also use a proxy form to submit new voting instructions, as long as they are received at least 48 hours before the start of the meeting. Your new instructions will revoke your earlier instructions.

If you voted by fax or mail, you can use a proxy form to submit new voting instructions, as long as they are received at least 24 hours before the start of the meeting.

You can also:

send us notice in writing (from you or a person authorized to sign on your behalf). We must receive it by 6 p.m. MDT on May 7, 2013, or by 6 p.m. MDT on the business day before the meeting is reconvened if it was postponed or adjourned. Send your notice to the Corporate Secretary, Enbridge Inc., 3000, 425-1st Street S.W., Calgary, Alberta T2P 3L8 Fax: 1.403.231.5929;
give your notice to the chair of the meeting before the start of the meeting. If you give him the notice after the meeting has started, your new instructions will apply only to the items of business that haven't already been voted on; or
change your vote in any other manner permitted by law.

2013 Management information circular      6


If your common shares are owned by a corporation, your notice must be under a corporate seal or issued by an authorized officer of the company or its attorney.

You can send us your new instructions in any other manner permitted by law.

Non-registered shareholders

Contact your nominee to find out how to change or revoke your vote and the timing requirements.

Voting results

We need a simple majority (at least 50% plus one vote) of all votes cast to elect the nominated directors, appoint the auditors and approve our approach to executive compensation.


CIBC Mellon counts the votes and will only show us a proxy form if:
  it is required by law;
  there is a proxy contest; or
  a shareholder has written comments on the proxy form that are clearly intended for Enbridge management.

 




Questions?

Contact our transfer agent

CIBC Mellon
1.800.387.0825
www.canstockta.com


ELECTING OUR DIRECTORS

On February 27, 2012, after receiving Mr. Daniel's letter advising that he would be retiring on or before the end of 2012, the Board resolved to increase the size of the Board from 12 to 13 directors and appointed Mr. Monaco to the Board. Mr. Monaco was also appointed President at that time. Mr. Daniel retired as Chief Executive Officer and from the Board effective September 30, 2012, and Mr. Monaco was appointed President & Chief Executive Officer effective October 1, 2012. All 12 current directors are standing for re-election to the Board. You can vote for all of them, vote for some and withhold your vote for others, or withhold your votes for all of them. Unless you instruct otherwise, the Enbridge proxyholders will vote for electing each of the nominated directors.

All of the directors are independent, except for Al Monaco, our President & Chief Executive Officer. There is no family relationship between any of the nominated directors.

Shareholders elect directors to the Board for a term of one year, until the end of the next annual meeting.

Our policy on majority voting

If a director receives more withheld votes than for votes, he or she will offer to resign. The Governance Committee will make a recommendation to the Board to:

accept the resignation;
ask the director to continue serving but address the issue; or
reject the resignation.

The director will not participate in any Board or Board Committee deliberations on the matter. If the Board accepts the director's resignation, it can appoint a new director to fill the vacancy. The Board must promptly disclose its final decision in a press release.

Board size

Our articles allow us to have up to 15 directors. The Board believes that its current size of 12 directors provides the skills and experience we need to make decisions effectively and meets the needs of the standing Board Committees.

The composition of the Board may also be affected by our agreement with Noverco Inc. (Noverco) and Gaz Métro inc. As long as Noverco or its subsidiaries own at least 8% of our total outstanding shares, Noverco may nominate one or more directors to the Board, in direct proportion to its share ownership relative to the total Enbridge shares outstanding. Noverco and its subsidiaries own less than 6% of our total outstanding shares, so this right currently does not apply.

7      ENBRIDGE INC.


Director profiles

The profiles that follow provide information about the nominated directors, including their background, areas of expertise, current directorships, securities held and the Board Committees they sit on.


David A. Arledge    

PHOTO

 

 
Age 68
Naples, Florida, USA
Independent

Director since
January 1, 2002

Chair of the Board
since May 2005

Latest date of retirement
May 2020

Areas of expertise
Energy
Finance
Oil & gas
Pipelines
Regulated businesses
   

    From 1983 until 2001, Mr. Arledge was principally employed by Coastal Corporation (energy company) which merged in early 2001 with El Paso Corporation (integrated energy company). He held various executive positions in finance from 1983 to 1993, including Senior Vice President, Finance & Chief Financial Officer, and from 1993 to 2001 held many senior executive and operating positions, retiring in 2001 as Chair, President & Chief Executive Officer.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk2 8 out of 10   (80%)
    Corporate Social Responsibility2 4 out of 4   (100%)
    Governance2 4 out of 4   (100%)
    Human Resources & Compensation2 6 out of 6   (100%)
    Total 32 out of 34   (96%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   32,600   43,511 $3,492,734   $630,000
    2012   32,600   39,348 $2,754,889   $420,000
   
    Other public and private company board/board committee memberships7
   
    Aviva USA Corp. Chair, board of directors
    (private insurance company that is a subsidiary of Aviva plc, a public company)      

James J. Blanchard    

PHOTO

 

 
Age 70
Beverly Hills, Michigan,
USA
Independent

Director since
January 25, 1999

Latest date of retirement
May 2018

Areas of expertise
Government
Legal
Environment
Safety & sustainability
Governance
   

    Gov. Blanchard has practiced law with DLA Piper US, LLP in Michigan and Washington, D.C. since 1996 and is the Chair Emeritus, Government Affairs of that firm. From 1993 to 1996, Gov. Blanchard served as the United States Ambassador to Canada. He was Governor of Michigan for eight years and served eight years in the United States Congress.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Corporate Social Responsibility (Chair) 4 out of 4   (100%)
    Governance 4 out of 4   (100%)
    Total 18 out of 18   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   10,977   94,563 $4,843,231   $630,000
    2012   25,770   89,016 $4,395,156   $420,000
   
    Other public and private company board/board committee memberships7,8.9
   
    Meridian International Center Chair, board of trustees
    (private, non-profit institution that promotes international understanding) Chair, executive committee
   
    National Archives Foundation (US) Member, board of directors
    (not-for-profit) Vice President
   
    The Canada-United States Law Institute U.S. Co-Chair
    (not-for-profit)      

2013 Management information circular      8



J. Lorne Braithwaite    

PHOTO

 

 
Age 71
Thornhill, Ontario, Canada
Independent

Director since
May 3, 1989

Latest date of retirement
May 2017

Areas of expertise
Finance
Mergers & acquisitions
Governance
Human resources
Real estate
Retail
   

    Mr. Braithwaite has been the President & Chief Executive Officer of Build Toronto Inc., an economic development corporation, since 2009. From 1978 to 2001 he was President & Chief Executive Officer of Cambridge Shopping Centres Limited (developer and manager of retail shopping malls in Canada).
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Corporate Social Responsibility10 2 out of 2   (100%)
    Governance10 2 out of 2   (100%)
    Human Resources & Compensation 6 out of 6   (100%)
    Total 20 out of 20   (100%)
   
    Enbridge securities held3      
    Year   Enbridge Shares11   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   86,090   36,336 $5,618,129   $630,000
    2012   84,760   33,989 $4,546,899   $420,000
   
    Other public and private company board/board committee memberships7
   
    Enbridge Gas Distribution Inc. Director
    (public utilities company that is a wholly-owned subsidiary of Enbridge) Member, audit, finance & risk committee
   
    Canada Post Pension Plan
(private pension plan)
Chair, investment advisory committee

J. Herb England    

PHOTO

 

 
Age 66
Naples, Florida, USA
Independent

Director since
January 1, 2007

Latest date of retirement
May 2022

Areas of expertise
Accounting and auditing
Finance
Mergers & acquisitions
Industrial relations
   
    Mr. England has been Chair & Chief Executive Officer of Stahlman-England Irrigation Inc. (contracting company) in southwest Florida since 2000. From 1993 to 1997, Mr. England was the Chair, President & Chief Executive Officer of Sweet Ripe Drinks Ltd. (fruit beverage manufacturing company). Prior to 1993, Mr. England held various executive positions with John Labatt Limited (brewing company) and its operating companies, including the position of Chief Executive Officer of Labatt Brewing Company – Prairie Region (brewing company), Catelli Inc. (food manufacturing company) and Johanna Dairies Inc. (dairy company). In 1993, Mr. England retired as Senior Vice President, Finance and Corporate Development & Chief Financial Officer of John Labatt Limited.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk 10 out of 10   (100%)
    Governance12 2 out of 2   (100%)
    Human Resources & Compensation12 3 out of 3   (100%)
    Total 25 out of 25   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares13   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   2,120   43,305 $2,084,553   $630,000
    2012   2,120   39,460 $1,592,098   $420,000
   
    Other public and private company board/board committee memberships7
   
    Enbridge Energy Company, Inc. Director
    (a private company that is an indirect, wholly owned subsidiary of Enbridge and general partner of Enbridge Energy Partners, L.P.) Chair, audit committee
   
    Enbridge Energy Management, L.L.C. Director
    (public management company in which Enbridge holds an interest) Chair, audit committee
   
    FuelCell Energy, Inc. Director
    (public fuel cell company in which Enbridge holds a small interest) Member, audit & finance committee
              Chair, compensation committee
   
    Goodwood Fund 2.0 Ltd.
(private registered regulated mutual fund)
Director
   
    Stahlman-England Irrigation Inc. Chair, board of directors
    (private contracting company) Chief executive officer

9      ENBRIDGE INC.



Charles W. Fischer    

PHOTO

 

 
Age 62
Calgary, Alberta, Canada
Independent

Director since
July 28, 2009

Latest date of retirement
May 2025

Areas of expertise
Business management
Energy
Engineering
Mergers & acquisitions
Oil & gas
   
    Mr. Fischer was the President & Chief Executive Officer of Nexen Inc. (oil and gas company) from 2001 to 2008. Since 1994, Mr. Fischer held various executive positions within Nexen Inc., including the positions of Executive Vice President & Chief Operating Officer in which he was responsible for all Nexen's conventional oil and gas business in Western Canada, the US Gulf Coast and all international locations, as well as oil sands, marketing and information systems activities worldwide. Prior thereto, Mr. Fischer held positions with Dome Petroleum Ltd., Hudson's Bay Oil & Gas Ltd., Bow Valley Industries Ltd., Sproule Associates Ltd. and Encor Energy Ltd.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 9 out of 10   (90%)
    Audit, Finance & Risk14 3 out of 3   (100%)
    Corporate Social Responsibility14 2 out of 2   (100%)
    Human Resources & Compensation 6 out of 6   (100%)
    Total 20 out of 21   (98%)
   
    Enbridge securities held3      
    Year   Enbridge shares15   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   8,000   12,922 $960,111   $630,000
    2012   8,000     9,919 $686,119   $420,000
   
    Other public and private company board/Board committee memberships7
   
    Enbridge Commercial Trust
(subsidiary of Enbridge Income Fund)
Trustee
   
    Enbridge Income Fund Holdings Inc.
(public holding company in which Enbridge holds an interest)
Director
   
    Pure Technologies Ltd. Director
    (public technology company) Member, audit and compensation committees
   
    Summerland Energy Inc.
(private oil and gas company)
Chair, board of directors
   
    Alberta Innovates – Energy and Environment Solutions Director
    (not-for-profit – energy and environmental research) Member, human resources & compensation committee
   
    Climate Change and Emission Management Corporation
(not-for-profit – energy and environmental research)
Director
   
    University of Calgary
(Canadian University)
Member, audit committee of the Board of Governors


V. Maureen Kempston Darkes    

PHOTO

 

 
Age 64
Lauderdale-by-the-Sea, Florida, USA
Independent

Director since
November 2, 2010

Latest date of retirement
May 2023

Areas of expertise
Governance
Government and public policy
Growth initiatives
International business
Legal
   
    Ms. Kempston Darkes is the retired Group Vice President and President Latin America, Africa and Middle East, General Motors Corporation (automotive corporation and vehicle manufacturer). From 1994 to 2001, she was the President and General Manager of General Motors of Canada Limited and Vice President of General Motors Corporation.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Corporate Social Responsibility 4 out of 4   (100%)
    Human Resources & Compensation 6 out of 6   (100%)
    Total 20 out of 20   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   12,705     9,682 $1,027,339   $630,000
    2012   10,000     8,089 $692,628   $420,000
   
    Other public and private company board/board committee memberships7,16
   
    Brookfield Asset Management Inc. Director
    (global asset management company) Chair, risk management committee
Member, management, resources & compensation committee
   
    Canadian National Railway Company Director
    (public railway company) Chair, environment, safety & security committee
Member, audit, human resources & compensation and strategic planning committees and member of the investment committee of CN's pension trust funds
   
    Irving Oil Company Limited Director
    (private oil company) Chair, audit & risk management committee
Member, human resources & compensation committee
   
    Balfour Beatty plc Director
    (infrastructure services company publicly listed in the UK) Member, nomination committee
Member, business practices committee

2013 Management information circular      10



David A. Leslie, F.C.A.    

PHOTO

 

 
Age 69
Toronto, Ontario, Canada
Independent

Director since
July 26, 2005

Latest date of retirement
May 2019

Areas of expertise
Accounting and auditing
Governance
Corporate tax
Finance
Mergers & acquisitions
   
    Mr. Leslie was the Chair & Chief Executive Officer of Ernst & Young LLP (private accounting firm) from 1999 until June 2004 and was a partner and held various senior management positions with the firm from 1977 to 2004.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk (Chair) 10 out of 10   (100%)
    Governance 4 out of 4   (100%)
    Total 24 out of 24   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   10,456   45,722 $2,578,008   $630,000
    2012   10,179   38,526 $1,864,914   $420,000
   
    Other public and private company board/board committee memberships7,17
   
    Enbridge Gas Distribution Inc. Director,
    (public utilities company that is a wholly-owned subsidiary of Enbridge) Chair, audit, finance & risk committee
   
    Crombie REIT Director
    (public real estate investment trust) Chair, audit committee
   
    Empire Company Limited Director
    (public food retail and related real estate company) Chair, audit committee and member, oversight, nominating & governance committee
   
    Sobeys Inc. Director
    (food merchandising company that is a wholly-owned subsidiary of Empire Company Limited) Chair, audit committee and member, oversight, nominating & governance committee
   
    IMRIS Inc. Director
    (public surgical imaging systems company) Chair, audit and governance committee
   
    MaRS Innovation
(not-for-profit business development organization)
Director


Al Monaco    

PHOTO

 

 
Age 53
Calgary, Alberta, Canada
Not independent

Director since
February 27, 2012

Latest date of retirement
May 2035

Areas of expertise
Business management
Energy
Finance
Oil & gas
Pipelines
   
    Mr. Monaco joined Enbridge in 1995. He has been President & Chief Executive Officer of Enbridge since October 1, 2012 and has served as President of Enbridge since February 27, 2012.
   
    Enbridge Board/Board Committee memberships18 2012 meeting attendance1
   
    Board of Directors 7 out of 7   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares19   Stock options Total market value of
Enbridge shares
(excluding stock options)5
  Minimum
required20
   
    2013   118,596   2,458,700 $5,442,370  
    2012   96,303   1,170,900 $3,687,442  
   
    Other public and private company board/board committee memberships7
   
    Enbridge Pipelines Inc.
(public pipeline company that is a wholly-owned subsidiary of Enbridge)
Director and Chair
   
    Enbridge Gas Distribution Inc.
(public utilities company that is a wholly-owned subsidiary of Enbridge)
Director
   
    University of Calgary
(Canadian university)
Member, investment committee of the Board of Governors
      Member, Dean's advisory board, Faculty of Medicine
   
    American Petroleum Institute
(trade association)
Director
   
    C.D. Howe Institute
(public policy institute)
Director

11      ENBRIDGE INC.



George K. Petty    

PHOTO

 

 
Age 71
San Luis Obispo,
California, USA
Independent

Director since
January 2, 2001

Latest date of retirement
May 2017

Areas of expertise
Telecommunications
Finance
Mergers & acquisitions
Business management
Energy
Governance
Regulated businesses
   

    Mr. Petty was President & Chief Executive Officer of Telus Corporation (telecommunications company) from 1994 to 1999. Prior thereto he was Vice President of Global Business Service for AT&T (telecommunications company) and Chair of the Board of directors of World Partners, the Global Telecom Alliance.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk 10 out of 10   (100%)
    Governance (Chair)21 2 out of 2   (100%)
    Corporate Social Responsibility21 2 out of 2   (100%)
    Total 24 out of 24   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares22   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   1,894   50,220 $2,391,511   $630,000
    2012   26,594   47,464 $2,835,681   $420,000
   
    Other public and private company board/board committee memberships7
   

Charles E. Shultz    

PHOTO

 

 
Age 73
Calgary, Alberta, Canada
Independent

Director since
December 1, 2004

Latest date of retirement
May 2015

Areas of expertise
Energy
Oil & gas
Human resources
Mining
Pipelines
Governance
   

    Mr. Shultz has been the Chair & Chief Executive Officer of Dauntless Energy Inc. (private oil and gas company) since he formed it in 1995. From 1990 to 1995, Mr. Shultz served as President & Chief Executive Officer of Gulf Canada Resources Limited (oil and gas company).
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk 10 out of 10   (100%)
    Human Resources & Compensation 6 out of 6   (100%)
    Total 26 out of 26   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   31,657   37,454 $3,171,504   $630,000
    2012   28,466   35,075 $2,432,985   $420,000
   
    Other public and private company board/board committee memberships7
   
    Enbridge Pipelines Inc.
(public pipeline company that is a wholly-owned subsidiary of Enbridge)
Director
   
    Canadian Oil Sands Limited Director
    (public oil and gas company) Member, reserves, marketing, operations & environmental health & safety committee
   
    Newfield Exploration Interim Lead Director
    (public oil and gas company) Member, audit committee

2013 Management information circular      12



Dan C. Tutcher    

PHOTO

 

 
Age 64
Houston, Texas, USA
Independent

Director since
May 3, 2006

Latest date of retirement
May 2024

Areas of expertise
Deregulated businesses
Energy
Engineering
Finance
Mergers & acquisitions
Oil & gas
Pipelines
Regulated businesses
Utilities
   

    Since its inception in 2007, Mr. Tutcher has been a Principal in Center Coast Capital Advisors L.P. He was the Group Vice President, Transportation South of Enbridge, as well as President of Enbridge Energy Company, Inc. (general partner of Enbridge Energy Partners, L.P. and an indirect, wholly-owned subsidiary of Enbridge) and Enbridge Energy Management, L.L.C. (management company in which Enbridge holds a 17.2% interest) from May 2001 until retirement on May 1, 2006. From 1992 to May 2001, he was the Chair of the Board of directors, President & Chief Executive Officer of Midcoast Energy Resources, Inc.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Corporate Social Responsibility 4 out of 4   (100%)
    Governance (Chair)23 4 out of 4   (100%)
    Total 18 out of 18   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares24   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   630,711   49,766 $31,227,090   $630,000
    2012   616,856   42,966 $25,264,584   $420,000
   
    Other public and private company board/board committee memberships7
   
    St. Luke's Episcopal Hospital
(US hospital)
Director
   
    Texas Heart Institute
(not-for-profit organization)
Director

Catherine L. Williams    

PHOTO

 

 
Age 62
Calgary, Alberta, Canada
Independent

Director since
November 1, 2007

Latest date of retirement
May 2026

Areas of expertise
Finance
Energy
Oil & gas
Mergers & acquisitions
Business management
   

    Ms. Williams was the Chief Financial Officer for Shell Canada Limited (oil and gas) from 2003 to 2007. Prior to that, she held various positions with Shell Canada Limited, Shell Europe Oil Products, Shell Canada Oil Products and Shell International (oil and gas companies) from 1984 to 2007.
   
    Enbridge Board/Board Committee memberships 2012 meeting attendance1
   
    Board of Directors 10 out of 10   (100%)
    Audit, Finance & Risk 10 out of 10   (100%)
    Human Resources & Compensation (Chair) 6 out of 6   (100%)
    Total 26 out of 26   (100%)
   
    Enbridge securities held3      
    Year   Enbridge shares   DSUs4 Total market value of
Enbridge shares and DSUs5
  Minimum
required6
   
    2013   28,841   22,066 $2,366,122   $630,000
    2012   25,394   18,616 $1,685,143   $420,000
   
    Other public and private company board/board committee memberships6
   
    Enbridge Pipelines Inc.
(public pipeline company that is a wholly-owned subsidiary of Enbridge)
Director
   
    Alberta Investment Management Corporation Director
    (Alberta Crown corporation) Chair, audit committee
1
Percentages are rounded up to the nearest whole number.
2
Mr. Arledge is not a member of any Board Committee, but he attends most of their meetings because he is the Chair of the Board.
3
Information about beneficial ownership and about securities controlled or directed by our proposed directors is provided by the nominees and is as at March 2, 2012 and March 5, 2013.
4
DSU's refer to deferred share units and are defined on page 36 of this circular.
5
Total market value = number of common shares or deferred share units × closing price of Enbridge common shares on the Toronto Stock Exchange (TSX) of $38.29 on March 2, 2012 and $45.89 on March 5, 2013. Amounts are rounded to the nearest dollar.
6
Effective January 1, 2013, Directors must hold at least three times their annual Board retainer, or $630,000, in DSUs or Enbridge shares and meet that requirement within five years of becoming a director on our Board.
7
Public means a corporation or trust that is a reporting issuer in Canada, a registrant in the US or both. Private means a corporation or trust that is not a reporting issuer or registrant. Not-for-profit means a corporation, society or other entity organized for a charitable, civil or other social purpose which does not generate profits for its members.

13      ENBRIDGE INC.


8
The Ontario Securities Commission, the British Columbia Securities Commission and the autorité des Marchés financiers issued a management cease trade order against insiders of Bennett Environmental Inc. on April 10, 2006, and another cease trade order on April 24, 2006 after Bennett failed to file its annual financial statements and related MD&A for the year ended December 31, 2005. The orders prevented certain Bennett directors, officers and insiders, including Governor Blanchard, from trading Bennett securities until the commissions received the documents. Bennett filed the documents on May 30, 2006 and the management cease trade order was revoked on June 19, 2006. Governor Blanchard was a director of Bennett until August 7, 2006.
9
On May 31, 2004 and again on April 10, 2006, certain directors, senior officers and certain current and former employees of Nortel Networks Corporation and Nortel Networks Limited were prohibited from trading in the securities of Nortel Networks Corporation and Nortel Networks Limited pursuant to management cease trade orders issued by the Ontario Securities Commission and certain other provincial securities regulators in connection with delays in the filing of certain financial statements. Following the filing of the required financial statements, the Ontario Securities Commission and subsequently the other provincial securities regulators lifted such cease trade orders effective June 21, 2005 and June 8, 2006 respectively. Governor Blanchard was a director of Nortel Networks Corporation until June 29, 2005. At no time did the above noted cease trade orders apply to Governor Blanchard.
10
Mr. Braithwaite ceased being a member of the Corporate Social Responsibility Committee in May 2012 and did not attend meetings of the Committee after that time. Mr. Braithwaite was appointed to the Governance Committee in May 2012 and attended all meetings of the Committee from the time of his appointment.
11
Mr. Braithwaite also owns 12,289 shares of Enbridge Income Fund Holdings Inc.
12
Mr. England ceased being a member of the Governance Committee in May 2012 and did not attend meetings of the Committee after that time. Mr. England was appointed to the Human Resources & Compensation Committee in May 2012 and attended all meetings of the Committee from the time of his appointment.
13
Mr. England also owns 7,876 units of Enbridge Energy Partners, L.P.
14
Mr. Fischer ceased being a member of the Corporate Social Responsibility Committee in May 2012 and did not attend meetings of the Committee after that time. Mr. Fischer was appointed to the Audit, Finance & Risk Committee in May 2012 and attended all meetings of the Committee from the time of his appointment.
15
Mr. Fischer also owns 25,000 shares of Enbridge Income Fund Holdings Inc.
16
Ms. Kempston Darkes was an executive officer of General Motors Corporation (GM) from January 1, 2002 to December 1, 2009. GM filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code on June 1, 2009. None of the operations for which she was directly responsible in Latin America, Africa and the Middle East were included in the bankruptcy filing. GM emerged from bankruptcy protection on July 10, 2009 in a reorganization in which a new entity acquired GM's most valuable assets.
17
Mr. Leslie was on the board of CanWest Global Communications Corp. from March 26, 2007 to January 14, 2009. On October 6, 2009, CanWest Global Communications Corp. voluntarily entered into (and successfully obtained) an order from the Ontario Superior Court of Justice (Commercial Division), commencing proceedings under the Companies' Creditors Arrangement Act.
18
Mr. Monaco was appointed to the Board on February 27, 2012. Mr. Monaco is not a member of any Board Committee. He attends Board Committee meetings at the request of the Board.
19
Mr. Monaco also owns 8,150 shares of Enbridge Income Fund Holdings Inc.
20
As President & Chief Executive Officer, Mr. Monaco is required to hold Enbridge shares equal to five times his base salary (see page 47). Mr. Monaco is not required to hold Enbridge shares as a director.
21
Mr. Petty ceased being a member of the Governance Committee in May 2012 and did not attend Committee meetings after such time. Mr. Petty was appointed to the Corporate Social Responsibility Committee in May 2012 and attended all meetings of the Committee from the time of his appointment.
22
Mr. Petty also owns 9,266 shares of Enbridge Energy Management, L.L.C. and 5,234 units of Enbridge Energy Partners, L.P.
23
Mr. Tutcher was appointed chair of the Governance Committee in May 2012.
24
Mr. Tutcher also owns 69,892 shares of Enbridge Energy Management, L.L.C. and 40,000 units of Enbridge Energy Partners, L.P.

2013 Management information circular      14


Director independence


  Director nominees   Independent   Non-Independent   Reason for non-independence  

David A. Arledge   ü          

James J. Blanchard   ü          

J. Lorne Braithwaite   ü          

J. Herb England   ü          

Charles W. Fischer   ü          

V. Maureen Kempston Darkes   ü          

David A. Leslie   ü          

Al Monaco       ü   President & Chief Executive Officer of the company  

George K. Petty   ü          

Charles E. Shultz   ü          

Dan C. Tutcher   ü          

Catherine L. Williams   ü          

Board Committee participation


  Director Audit, Finance &
Risk Committee
  Corporate Social
Responsibility
Committee
  Governance
Committee
  Human Resources
& Compensation
Committee
 

Management directors – not independent              

Al Monaco                

Outside directors – independent                

David A. Arledge1                

James J. Blanchard     Committee chair   ü      

J. Lorne Braithwaite         ü   ü  

J. Herb England2 ü           ü  

Charles W. Fischer ü           ü  

V. Maureen Kempston Darkes     ü       ü  

David A. Leslie2 Committee chair       ü      

George K. Petty ü   ü          

Charles E. Shultz ü           ü  

Dan C. Tutcher     ü   Committee chair      

Catherine L. Williams2 ü           Committee chair  

1
Mr. Arledge is not a member of any of the committees of the Board. He attends most of the Committee meetings in his capacity as Chair of the Board.
2
Mr. Leslie, Mr. England and Ms. Williams each qualify as an audit committee financial expert, as defined by the US Securities Exchange Act of 1934. The Board has also determined that all the members of the Audit, Finance & Risk Committee are financially literate, according to the meaning of National Instrument 52-110 – Audit Committees (NI 52-110) and the rules of the New York Stock Exchange (NYSE).

Board and Board Committee meetings


  Board/Committee   In-camera sessions   Total number of
meetings
  Overall attendance  

Board   7   10   99%  

Audit, Finance & Risk Committee   7   10   97%  

Corporate Social Responsibility Committee   4   4   100%  

Governance Committee   4   4   100%  

Human Resources & Compensation Committee   6   6   100%  

Total   28   34   99%  

15      ENBRIDGE INC.


Director attendance


            Board Committee meetings  
           
    Board of
Directors
meetings
(10 meetings)
  Audit, Finance
& Risk
(10 meetings)
  Corporate Social Responsibility
(4 meetings)
  Governance
(4 meetings)
  Human Resources & Compensation
(6 meetings)

 

 

Number

 

%

 

Number

 

%

 

Number

 

%

 

Number

 

%

 

Number

 

%

 

David A. Arledge1   10   100   8   80   4   100   4   100   6   100  

James J. Blanchard   10   100       4   100   4   100      

J. Lorne Braithwaite2   10   100       2   100   2   100   6   100  

Patrick D. Daniel3   8   100                  

J. Herb England4   10   100   10   100       2   100   3   100  

Charles W. Fischer5   9   90   3   100   2   100       6   100  

V. Maureen Kempston Darkes   10   100       4   100       6   100  

David A. Leslie   10   100   10   100       4   100      

Al Monaco6   7   100                  

George K. Petty7   10   100   10   100   2   100   2   100      

Charles E. Shultz   10   100   10   100           6   100  

Dan C. Tutcher   10   100       4   100   4   100      

Catherine L. Williams   10   100   10   100           6   100  

        99%       97%       100%       100%       100%  

1
Mr. Arledge is not a member of any Board Committee, but he attends most of their meetings because he is the Chair of the Board.
2
Mr. Braithwaite was appointed as a member of the Governance Committee and ceased being a member of the Corporate Social Responsibility Committee in May 2012.
3
Mr. Daniel retired as Chief Executive Officer and Director effective September 30, 2012. He was not a member of any Board Committee but attended Board Committee meetings at the request of the Board until his retirement.
4
Mr. England was appointed as a member of the Human Resources and Compensation Committee and ceased being a member of the Governance Committee in May 2012.
5
Mr. Fischer was appointed a member of the Audit Finance & Risk Committee and ceased being a member of the Corporate Social Responsibility Committee in May 2012.
6
Mr. Monaco joined the Board on February 27, 2012. Mr. Monaco is not a member of any Board Committee. He attends Board Committee meetings at the request of the Board.
7
Mr. Petty was appointed to the Corporate Social Responsibility Committee and ceased being a member of the Governance Committee in May 2012.

2013 Management information circular      16


Mix of skills and experience


  Skill/experience   Number of directors with significant
senior level experience
 

Managing and leading growth
Experience driving strategic direction and leading growth of an organization.
  12  

International
Experience working in a major organization with global operations where Enbridge is or may be active.
  10  

Chief executive officer/senior officer
Experience as a chief executive officer or senior officer of a publicly listed company or major organization.
  12  

Governance/board
Experience as a board member of a publicly listed company or major organization.
  12  

Operations
Experience in the oil and gas/energy (including pipelines) industries, and knowledge of markets, financials, operational issues, regulatory concerns and technology.
  7  

Sustainable development
Understanding the elements of sound sustainable development practices and their relevance to corporate success.
  10  

Marketing expertise
Marketing experience in the energy marketing industry combined with a strong knowledge of market participants.
  5  

Human resources/compensation
Strong understanding of compensation, benefit and pension programs, legislation and agreements, with specific expertise in executive compensation programs.
  10  

Investment banking/mergers & acquisitions
Experience in investment banking or in major mergers and acquisitions.
  9  

Financial literacy
Experience in financial accounting and reporting and corporate finance, especially with respect to debt and equity markets and familiarity with internal financial controls, Canadian or US generally accepted accounting principles and/or international financial reporting standards.
  12  

Information technology
Experience in information technology with major implementations of management systems.
  5  

Health, safety, environment and social responsibility
Thorough understanding of industry regulations and public policy and leading practices in the areas of workplace safety, health, the environment and social responsibility.
  8  

Government relations
Experience in (or a strong understanding of) the workings of government and public policy in Canada and the US.
  9  

Emerging sectors
Experience in sectors which Enbridge hopes to develop a presence, including liquefied natural gas, power generation and new energy technologies.
  7  

Continuing Education


  Date   Topic   Presented/hosted by   Who attended  

March 19, 2012   "The Quest" – Energy, Security and the Remaking of the Modern World   Daniel Yergin   All members of the Board  

August 1, 2012   North American Crude and Product Markets   PIRA Energy Group   All members of the Board  

September 6, 2012   Board tour of ECHO terminal and Lyondell Refinery and Board helicopter tour of the Houston Ship Channel and Port of Houston from Ellington Field   Enbridge Inc.   All members of the Board other than Gov. Blanchard  

November 6, 2012   Energy Marketing Business Update   Enbridge Inc.   All members of the Board  

17      ENBRIDGE INC.


Interlocking relationships


  Directors   Served together on these boards   Served on these committees  

J. Lorne Braithwaite   Enbridge Gas Distribution Inc.1   Audit, finance & risk committee  
David A. Leslie       Chair of the audit, finance & risk committee  
Al Monaco        

Al Monaco   Enbridge Pipelines Inc.1    
Charles E. Shultz        
Catherine L. Williams        

1
Enbridge Gas Distribution Inc. and Enbridge Pipelines Inc. are considered public companies because they are reporting issuers in Canada, but they do not have any equity securities that are publicly held. They are both wholly-owned subsidiaries of Enbridge.

Director tenure

The graph below shows our director tenure as of March 5, 2013. The average tenure is 8.5 years.

GRAPHIC

APPOINTING OUR AUDITORS

You will vote on appointing Enbridge's auditors. You may vote for the reappointment of our auditors or withhold your vote. The Board, on the recommendation of the Audit, Finance & Risk Committee, proposes that PwC be reappointed as auditors and that you vote for the reappointment of our auditors.

If PwC is reappointed, they will serve as our auditors until the end of the next annual meeting of shareholders. PwC and its predecessor firm, Price Waterhouse, have been our auditors since 1992 and auditors for Enbridge Pipelines Inc., our wholly-owned subsidiary, since 1949.

PwC is a participating audit firm with the Canadian Public Accountability Board, as required under the Canadian Securities Administrators' National Instrument 52-108 – Auditor Oversight.

2013 Management information circular      18


Auditor Independence

Auditor independence is essential to the integrity of our financial statements and PwC has confirmed its status as independent within the meaning of the Canadian and US securities rules.

We are subject to Canadian securities regulations (NI 52-110 and National Policy 58-201 – Corporate Governance Guidelines (NP 58-201), the US Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the accounting and corporate governance rules adopted by the US Securities and Exchange Commission under Sarbanes-Oxley, which specify certain services that external auditors cannot provide.

We comply with these Canadian and US rules. We believe, however, that some non-audit services, like tax compliance, can be delivered more efficiently and economically by our external auditors. To maintain auditor independence, our Audit, Finance & Risk Committee must pre-approve all audit and non-audit services. It is also responsible for overseeing the audit work performed by PwC.

The Audit, Finance & Risk Committee reviews our external auditors' qualifications and independence once a year. Their review includes formal written statements that describe any relationships between the auditors, their affiliates and Enbridge that could affect the auditors' independence and objectivity.

Auditors' fees

The table below shows the services PwC provided to Enbridge in 2012, by category. It also shows the fees PwC billed for these services in 2011 and 2012.

 
   
   
   
 

      2012     20111   Description of fee category  

Audit fees   $ 10,919,000   $ 10,916,624   Represents the aggregate fees for audit services.  

Audit-related fees     927,480     336,496   Represents the aggregate fees for assurance and related services by the company's auditors that are reasonably related to the performance of the audit or review of the company's financial statements and are not included under "Audit fees". During fiscal 2012 and 2011, the services provided in this category included due diligence related to prospectus offerings and other items.  

Tax fees     1,128,846     1,276,159   Represents the aggregate fees for professional services rendered by the company's auditors for tax compliance, tax advice and tax planning.  

All other fees     912,555     670,304   Represents the aggregate fees for products and services provided by the company's auditors other than those services reported under "Audit fees", "Audit-related fees" and "Tax fees". These fees include those related to US GAAP, Canadian Public Accountability Board fees, French translation work and process reviews.  

Total fees   $ 13,887,881   $ 13,199,583      

1
Comparative figures presented above have been restated to include fees for Enbridge Energy Partners, L.P. (EEP), which is now consolidated within the company's consolidated financial statements prepared in accordance with US GAAP. Fees billed to EEP are for services provided by the US affiliate of the company's auditors.

You can find information about the roles and responsibilities of the Audit, Finance & Risk Committee starting on page 28 of this circular and details about the committee's pre-approval policies and procedures beginning on page 40 of our annual information form for the year ended December 31, 2012 (available online at www.enbridge.com and www.sedar.com).

19      ENBRIDGE INC.


HAVING A "SAY ON PAY"

Maintaining high standards of corporate governance involves responding to emerging best practices.

We announced in February 2010 that we would have an advisory vote on executive compensation starting at our 2011 annual meeting. The Board decided to hold an advisory vote after lengthy discussions on the matter. In addition, several Board members met with the Canadian Coalition for Good Governance (CCGG) about governance practices and shareholder engagement. At the 2012 annual and special meeting of shareholders, shareholders voted 94% in favour of our approach to executive compensation. In August 2012, the Board decided to again hold an advisory vote on executive compensation at the 2013 annual meeting.

While this vote is non-binding, it gives shareholders an opportunity to provide important input to our Board.

As a shareholder, you will be asked to vote for or against, or you may abstain from voting on our approach to executive compensation through the following resolution:

Be it resolved, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in our management information circular dated March 5, 2013, delivered in advance of the 2013 annual meeting of shareholders on May 8, 2013.

The Board will take the results of this vote into account when it considers future compensation policies and issues. We will also examine the level of shareholder interest and the comments we receive and consider the best approach and timing for soliciting feedback from shareholders on our approach to executive compensation in the future.

SHAREHOLDER PROPOSALS

We received no shareholder proposals for consideration at the meeting.

Under the Canada Business Corporations Act, which governs Enbridge, we must receive shareholder proposals by December 5, 2013 to consider them for inclusion in the management information circular and proxy for the 2014 annual meeting of shareholders, which is expected to be held on May 7, 2014.

We will post the results of this year's votes and the other items of business on our website (www.enbridge.com) following the shareholders' meeting.

2013 Management information circular      20


2.        Governance

OUR GOVERNANCE PRACTICES

Sound governance means sound business. At Enbridge, we believe good governance is important for our shareholders, our employees and our company.

We have a comprehensive system of stewardship and accountability that follows best practices and meets the requirements of all rules, regulations and policies that apply.

This section discusses our governance philosophy, policies and practices. It also describes the role and functioning of our Board and the four Board Committees.

You can find more information about governance in our annual information form for the year ended December 31, 2012. Our articles and by-laws also set out policies and practices that govern our business activities. These are all available on our website (www.enbridge.com).

Regulations, rules and standards

Enbridge is listed on the TSX and the NYSE and we are subject to a range of governance regulations, rules and standards:

Canada

National Instrument 58-101 – Disclosure of Corporate Governance Practices;
NP 58-201;
NI 52-110; and
Canada Business Corporations Act.

US

As a "foreign private issuer" under US securities laws, we are generally permitted to comply with Canadian corporate governance guidelines and rules, rather than those that apply to US listed corporations.

The NYSE rules, however, require us to disclose how we comply with US corporate governance standards and where our practices are different. You can find this document on our website (http://www.enbridge.com/ InvestorRelations/ CorporateGovernance/ USCompliance.aspx). We must also comply with the audit committee requirements under Rule 10A-3 of the US Securities Exchange Act of 1934. See Audit, Finance & Risk Committee in our annual information form for the year ended December 31, 2012 for a summary of these requirements.

As of the date of this circular, the Board believes we are in full compliance with all Canadian and US corporate governance regulations, rules and standards that apply to us.

A CULTURE OF ETHICAL CONDUCT

A strong culture of ethical conduct is central to governance at Enbridge.

Our statement on business conduct (available on our website at www.enbridge.com) is our formal statement of expectations on ethics. It applies to everyone at Enbridge and our subsidiaries, including our directors, officers and employees, as well as consultants and contractors who work with us.

It discusses what we expect in areas like:

  complying with the law and undertakings;
  interacting with landowners, customers, shareholders, employees and others;
  protecting health, safety and the environment;
    acquiring, using and maintaining assets;
  using computers and communication devices;
  conflicts of interest; and
  proprietary, confidential and insider information.

The Board reviews the statement on business conduct at least once a year and updates it as necessary (it did not make any material changes in 2012).

21      ENBRIDGE INC.



All new employees at Enbridge and each of our subsidiaries must, as a condition of employment, sign a certificate of compliance indicating that they have read the statement on business conduct, understand it and agree to comply with it. Every year, all employees have to confirm that they have complied with it.

Directors must also certify that they agree with the statement on business conduct and will comply with it, both when they join our Board and every year they serve on it.

All employees were asked, through an electronic training and certification process, to certify their compliance with the statement on business conduct for the year ended December 31, 2012. As of the date of this circular, over 99% of Enbridge employees had certified compliance. For the first time, many of Enbridge's contract workers also participated in the online training and certification process this year.

 




Building awareness

We use online training to help raise awareness and reinforce our commitment to ethical conduct.

To date, we have developed online training programs on fraud awareness and the statement on business conduct.


The Chief Executive Officer and all members of the Board certified their compliance with the statement on business conduct in 2012.

Handling conflicts of interest


If a director or officer has a material interest in a transaction or agreement involving Enbridge, he or she must:
  disclose the conflict or potential conflict;
  choose not to participate in any discussions on the matter; and
  abstain from voting on the matter at any Board meeting where it is being discussed or considered.

This approach is consistent with the requirements of the
Canada Business Corporations Act.

Insider trading

Our insider trading and reporting guidelines, which were amended in March 2011, put restrictions on insiders and those in a special relationship with Enbridge when they trade Enbridge shares. The guidelines, which fulfill our obligations to stock exchanges, regulators and investors, include the following measures:

 




Material transactions

No informed person or nominated director (or any associate or affiliate) has or had a direct or indirect material interest in any Enbridge transaction in 2012 or in any proposed transaction that had or will have a material effect on Enbridge or any of our subsidiaries in the forseeable future.


having quarterly and annual trading blackout periods when financial results are being prepared and have not yet been publicly disclosed. These begin on the fifth day following the end of a quarter or fiscal year and end at the close of trading on the second trading day after we issue the news release or disclose our financial results;
publishing and communicating the dates for regular blackout periods;
encouraging all insiders to pre-clear transactions with the Corporate Secretary's office; and
prohibiting all directors, officers and employees from engaging in hedging transactions.

Whistleblower procedures

Our whistleblower procedures help uphold our strong values and preserve our culture of ethical business conduct.

We introduced whistleblower procedures to protect the integrity of our accounting, auditing and financial processes. We expanded the system in 2008 to include a broad range of matters relating to ethics and conduct. The whistleblower procedures were updated during 2012, primarily to reflect the fact that the Chief Compliance Officer has been designated as the person responsible for administering the procedures.

Employees can report concerns about financial or accounting irregularities or unethical conduct confidentially to the chair of the Audit, Finance & Risk Committee. All submissions may be made anonymously and any complaints submitted in a sealed envelope marked "private and strictly confidential" will be delivered to the committee chair unopened. Complaints can also be made anonymously using a toll-free number and a reporting system administered by an independent third party provider.

2013 Management information circular      22


At least once each quarter, the chair informs the Audit, Finance & Risk Committee about any complaints received (sooner if there is an urgent matter), discusses them with the Chief Compliance Officer and recommends how each complaint should be handled. The committee can hire independent advisors (outside legal counsel, independent auditors and others) to help investigate a matter. We pay for these costs.

THE ROLE OF THE BOARD

The Board is ultimately responsible for governance at Enbridge and for stewardship of the company. It has full power to oversee the management of our business and affairs.

It carries out many of its responsibilities through its four standing Board Committees:

Audit, Finance & Risk;
Corporate Social Responsibility;
Governance; and
Human Resources & Compensation.

The Board:

reviews and approves the strategic plan, provides guidance and monitors our progress;
monitors our risk management programs and helps us identify principal risks;
makes sure we have appropriate internal control and management systems in place to manage money, compliance and risk and that these systems are functioning appropriately; and
approves major projects, plans and initiatives that could materially affect the company.

The Board delegates day-to-day management of Enbridge to the Chief Executive Officer and senior management, although major capital expenditures, debt and equity financing arrangements and significant acquisitions and divestitures require Board approval.

Duties

The Board is responsible for overseeing our business affairs and management, particularly in key areas like governance, strategic planning, risk management, succession planning and corporate disclosure. These duties are described in our terms of reference for the Board and the Board Committees. They are drafted by management under the guidance of the Governance Committee and approved by the Board, which reviews them once a year and updates them as needed.

The Board is responsible for developing position descriptions for the Chair of the Board and each committee chair. These descriptions are part of their terms of reference and are reviewed annually. The Board has also developed terms of reference for the President & Chief Executive Officer. The Governance Committee defines the division of duties between the Board and our Chief Executive Officer.

You can find more information about the responsibilities of our Board in the Canada Business Corporations Act and in the articles and by-laws and terms of reference on our website (www.enbridge.com).

Strategic planning

The Board is responsible for reviewing our strategic planning process and for reviewing and approving our strategic plan. It oversees the implementation of the plan, monitors our progress and approves any transactions it believes will have a significant impact on the plan or our strategic direction.

The Board devotes two meetings a year to the strategic plan, including one meeting that is held over two days.

Risk management

The Board is responsible for overseeing risk and the risk assessment process, including:

establishing the risk tolerance;
making sure we identify principal risks once a year;
ensuring the implementation of appropriate systems to manage risks;
monitoring our risk management programs; and
seeking assurance that our internal control systems and management information systems are in place and operating effectively.

23      ENBRIDGE INC.


Corporate risk assessment

We have a comprehensive risk assessment system that incorporates information from each of our major businesses. This process involves analyzing both existing and emerging risks in defined categories and any factors that might mitigate them. The Board and the Audit, Finance & Risk Committee review our principal business risks every year, monitor our risk management program and work with our internal and external auditors to oversee the risk review process.

Operational Risk Management Plan (ORM Plan)

The Board is responsible for providing direction on our ORM Plan which broadly aims to position us as the industry leader for system integrity, environmental and safety programs, and charts the course for best-in-class practices. Each of the major business units presents their ORM Plan progress to the Board annually and provides interim updates to the Corporate Social Responsibility Committee.

Board Committees' role in risk management

The Board has delegated specific risk management responsibilities to each Board Committee. The Board Committees can authorize the implementation of systems that address risks within the scope of their responsibility and monitor them to ensure they remain effective. For example, the Corporate Social Responsibility Committee authorized our guidelines on the global reporting initiative and our environmental risk management system.

Internal controls

The Board seeks assurance at least annually that our internal control systems and management information systems are operating effectively.

The Board has delegated responsibility for reviewing our quarterly and annual financial statements to the Audit, Finance & Risk Committee, which recommends them to the Board for approval. The committee is also responsible for overseeing our internal audit function and senior management reporting on internal controls.

Corporate communications

The Board approves all major corporate communications policies, including our corporate disclosure guidelines, which it reviews and approves annually. It also reviews and approves all corporate disclosure documents, including our:

  annual and quarterly reports to shareholders;
  MD&A;
    annual information form; and
  management information circular.

The Board works to ensure we communicate effectively with shareholders, the public and other stakeholders to avoid selective disclosure.

Succession planning

The Board is responsible for:

appointing the Chief Executive Officer and other members of senior management;
monitoring senior management's performance; and
reviewing the succession strategy for all senior management positions every year.

It delegates responsibility for reviewing our policies and procedures relating to employment, succession planning and compensation (including executive compensation) to the Human Resources & Compensation Committee.

The Human Resources & Compensation Committee is also responsible for:

making sure we have appropriate programs for dealing with succession planning and employee retention;
monitoring the performance of senior management;
overseeing human capital risk to make sure our management programs (including those for our officers) effectively address succession planning and employee retention;
overseeing the design of our compensation programs from a risk perspective; and
reporting to the Board on organizational structure and succession planning matters.

2013 Management information circular      24


OUR EXPECTATIONS OF OUR DIRECTORS

Our directors are expected to act in the best interests of Enbridge. They have a duty of care to exercise in both decision making and oversight.

Independence

First and foremost, we believe in the importance of an independent board. The Governance Committee is responsible for making sure the Board functions independently of management.

The majority of our directors must be independent, as defined by Canadian securities regulators in NI 52-110, NYSE rules and the rules and regulations of the US Securities and Exchange Commission.

We define a director as independent if he or she does not have a direct or indirect material relationship with Enbridge. The Board believes that a relationship is material if it could reasonably interfere with a director's ability to make independent decisions, regardless of any other association he or she may have. The Board uses a detailed questionnaire to determine if a director is independent.

Eleven of our 12 nominated directors, including the Chair of the Board, are independent. Mr. Monaco is not independent because he is our President & Chief Executive Officer and a member of management.

The Governance Committee has developed guidelines to give directors a clear picture of the Board's expectations. Key expectations include meeting attendance, financial literacy and ethical conduct.

Separate chair and chief executive officer positions

We have an independent, non-executive Chair of the Board who is responsible for leading the Board.

Meeting in camera

Our terms of reference stipulate that the Board must hold in-camera meetings regularly, without officers or management present. Both the Board and Board Committees meet in camera and independently of management at every regularly scheduled meeting. The Chair of the Board provides the Chief Executive Officer with a summary of the matters discussed at these in-camera meetings, including any issues that the Board expects management to pursue.

Other directorships

Our directors may serve on the boards of other public companies and together on the boards and committees of other public entities, as long as their common memberships do not affect their ability to exercise independent judgment while serving on our Board. See Interlocking relationships on page 18 for information about some of our directors who serve together on other boards.

Directors who serve on our Audit, Finance & Risk Committee cannot sit on the audit committees of more than two other public entities unless they receive approval from our Board. In 2009, the Board approved Mr. Leslie serving on the audit committees of four publicly traded companies, including Enbridge. Since Mr. Leslie is no longer employed full-time, the Board believes he has the time to meet these commitments and his work on the boards and audit committees of these companies is very valuable to him and the Board in his role as chair of our Audit, Finance & Risk Committee. Mr. Leslie continues to serve on the audit committees of the three other publicly traded companies.

External consultants and other third parties

To make sure the Board functions independently of management, Board Committees have the flexibility to meet with external consultants and Enbridge employees without management whenever they see fit. The terms of reference also allow individual directors, the Board and Board Committees to hire independent advisors, as needed.

25      ENBRIDGE INC.


Attendance

We expect directors to attend all Board and Board Committee meetings of which they are a member and the annual meeting of shareholders. The Governance Committee reviews each director's attendance record every year. If a director has a poor attendance record, the committee chair and Chair of the Board will discuss and recommend how to handle the matter. A director whose attendance record continues to be poor may be asked to leave the Board. In 2012, the overall attendance at Board and Committee meetings was 99%. Please see information on attendance in the Director Profiles beginning on page 8.

Financial literacy

The Board defines an individual as financially literate if he or she can read and understand financial statements that are generally comparable to ours in breadth and complexity of issues. The Board has determined that all of the members of the Audit, Finance & Risk Committee are financially literate according to the meaning of NI 52-110 and the rules of the NYSE. It has also determined that Mr. England, Mr. Leslie and Ms. Williams each qualify as "audit committee financial experts" as defined by the US Securities Exchange Act of 1934. The Board bases this determination on each director's education, skills and experience.

Orientation and continuing education

The Board recognizes that proper orientation and continuing education are important for directors to fulfill their duties effectively. It has delegated these responsibilities to the Governance Committee, which has developed a comprehensive program for new directors and for directors who join a committee for the first time.

Orientation

Every new director meets with the Chair of the Board, the President & Chief Executive Officer and senior management to learn about our business and operations and participates in tours of our sites and facilities.

New directors are also given a copy of the Board manual, which contains:

  personal information about each of the directors and senior officers;
  a list of the members of the Board, the members of the Board Committees and all meeting dates;
  organizational charts (corporate and management);
  our financial risk management policies;
  statutory liabilities;
    information about the directors' and officers' liability programs;
  insider trading and indemnity agreements;
  information about our dividend reinvestment and share purchase plan;
  our statement on business conduct; and
  public disclosure documents for our subsidiaries.

Directors are notified by email whenever there are updates to these documents. The manual and any updates are also posted on the Board portal, software that allows directors to securely access board documents online.

Continuing education

We offer education sessions for directors on key topics and encourage them to participate in associations and organizations that can broaden their awareness and knowledge of developments related to our business. Throughout their tenure, directors have discussions with the Chair of the Board, receive quarterly presentations from senior management on strategic issues and participate in tours of our operations. Quarterly briefings include reviews of the competitive environment, our performance relative to our peers and any other developments that could materially affect our business. Directors can also request presentations on a particular topic. See the list of the internal seminars and other presentations we offered in 2012 and director participation on page 17.

We also pay for continuing education opportunities through third parties and we encourage directors to pursue director education seminars and courses offered externally.

A number of our directors are members of Canada's Institute of Corporate Directors (ICD), including Mr. Leslie (chair of the Audit, Finance & Risk Committee), Mr. Shultz (a member of the Audit, Finance & Risk and Human Resources & Compensation Committees) and Ms. Williams (chair of the Human Resources & Compensation Committee). Mr. Leslie is also an active member of the Canadian Audit Committee Network. Ms. Kempston Darkes was recognized by the ICD

2013 Management information circular      26



in 2011 with a Fellowship Award, which the ICD considers to be the highest distinction for directors in Canada. Mr. Shultz will be receiving this Fellowship Award from the ICD at its national conference in May 2013.

BOARD EVALUATION

The Governance Committee is responsible for assessing the performance of the Board and its Chair, the Board Committees and individual directors on an ongoing basis.

Assessing the Board and Chair of the Board

All of the directors complete a confidential questionnaire every year so they can evaluate the effectiveness of the Board and suggest ideas for improving performance. The questionnaire is designed to provide constructive input to improve overall Board performance and includes questions on:

  Board composition;
  effectiveness of the Board, Board meetings and Chair of the Board;
    duties and responsibilities;
  Board orientation and development; and
  the evaluation process for senior management.

In 2011, the evaluation process was revised to include additional questions for directors to evaluate their peers. The directors were asked to consider criteria such as skills and experience, preparation, attendance and availability, communication and interaction with Board members and/or management and business, company and industry knowledge. Directors were encouraged to comment broadly, positively and negatively, on any issue concerning the Board, Board Committees and director performance.

Directors submit their completed questionnaires to the chair of the Governance Committee, who presents the feedback to the Chair of the Board. The chair of the Governance Committee then presents the summary to the Board. The Board discusses the results and develops recommendations as appropriate.

From time to time, the Chair of the Board meets informally with each director, to discuss performance of the Board, Board Committees and other issues.

Board Committee assessments

Each director also completes a confidential questionnaire for each Board Committee of which they are a member. The questionnaire is designed to facilitate candid conversation among the members of each Board Committee about the Board Committee's overall performance, function, areas of accomplishment and areas for improvement. This session takes place in camera at the first Board Committee meeting after the directors complete their questionnaires.

The questionnaire helps the Board ensure each Board Committee is functioning effectively and efficiently and fulfilling its duties and responsibilities as described in its terms of reference. It includes questions about:

  the composition of the Board Committee;
  the effectiveness of the Board Committee and Board Committee meetings;
    committee members, including the chair; and
  the orientation and development processes for the Board Committee.

Completed questionnaires are submitted to the chair of the Governance Committee, who summarizes them and provides a copy to each Board Committee chair and the Chair of the Board.

Identifying new candidates

Directors generally retire from our Board at the age of 73. A director may be asked to remain on the Board for an additional two years if the Board unanimously approves the extension. If a director receives an extension, he or she is not eligible to serve as Chair of the Board or chair of any of the Board's four standing Board Committees.

The Governance Committee serves as the nominating committee and is responsible for identifying new candidates for nomination to the Board. The Governance Committee also invites and welcomes suggestions from other directors on our Board and from management. The committee reviews a Board composition plan annually. The plan consists of a skills matrix that includes the name of each director, his or her occupation, residence, gender, age, years on the Board, retirement date, business experience, other board commitments, equity ownership, independence and other relevant information. The committee summarizes the plan to identify the ideal skills and experience of a new candidate. These

27      ENBRIDGE INC.



include management, board and industry experience, areas of expertise, global representation, gender and age, among others. The committee ranks each of these skills and areas of experience as a high, medium or low priority.

The Governance Committee then develops a list of potential candidates with the desired skills and experience and reviews and updates the list at least once a year. When a position becomes available, the Board reviews the list of potential candidates, revises it to reflect the skills and experience most needed at the time, adds other recently identified candidates and prepares a short list. The committee also considers the candidate's background and diversity of experience in making their choices.

The chair of the Governance Committee, the Chair of the Board, the President & Chief Executive Officer and sometimes other directors, meet with potential candidates to determine their interest, availability, experience and suitability. The Governance Committee makes a recommendation to the Board. The Board discusses the recommendation and decides which candidates will be put forward for election at the annual meeting of shareholders.

About diversity

We are committed to increasing the diversity of our Board over time by actively seeking qualified candidates who meet diversity criteria. Enbridge is one of over 40 founding members of the Canadian Board Diversity Council.

BOARD COMMITTEES

Our Board has four standing Board Committees to help it carry out its duties and responsibilities:

  Audit, Finance & Risk;
  Corporate Social Responsibility;
    Governance; and
  Human Resources & Compensation.

The Board has delegated certain responsibilities to each Board Committee, including overseeing risk management systems that are within the scope of the responsibilities of each Board Committee. Each Board Committee is made up entirely of independent directors. Mr. Monaco, our President & Chief Executive Officer, is not a member of any Board Committee.

Board Committee meetings generally take place before each regularly scheduled Board meeting. Each Board Committee also meets in camera, independent of management, following the regular Board Committee meeting. They also meet with external consultants and/or Enbridge staff, without management present, whenever they see fit.

Each Board Committee reports regularly to the Board and makes recommendations on certain matters as appropriate. The Governance Committee is responsible for recommending the role of each Board Committee to the Board.

Audit, Finance & Risk Committee

Chair:   David Leslie
Members:   Herb England, Charlie Fischer, George Petty, Chuck Shultz and Cathy Williams

The Audit, Finance & Risk Committee assists the Board in overseeing:

the integrity of our financial statements and financial reporting process;
the integrity of our management information systems, disclosure controls, financial controls and internal audit function;
our external auditors, PwC, and ensuring they maintain their independence; and
our compliance with financial and accounting regulatory requirements and our risk management program.

The Audit, Finance & Risk Committee is responsible for ensuring the committee, our external auditors, our internal auditors and management of Enbridge maintain open communications.

The Audit, Finance & Risk Committee is responsible for:

Financial reporting

reviewing our quarterly and annual MD&A, financial statements and notes and recommending them to the Board for approval;
reviewing and approving earnings releases and recommending them to the Board for approval;

2013 Management information circular      28


discussing with management and the external auditors any significant issues regarding our financial statements and accounting policies;
reviewing with management any anticipated changes in reporting standards and accounting policies;

Internal controls

overseeing management's system of disclosure controls and procedures;
overseeing the internal controls over financial reporting;
overseeing the internal audit function;

External auditors

reviewing the qualifications and independence of our external auditors, PwC, and recommending their appointment to the Board;
reviewing all audit and non-audit services to be provided by the external auditors, including proposed fees, and pre-approving them, consistent with our policy; and
setting the compensation of the external auditors, reviewing their performance, overseeing their activities and retaining them in their role as external auditors.

The external auditors report directly to the Audit, Finance & Risk Committee. They meet regularly with the committee, in camera, without any members of management present. The chair of the committee also meets with the senior partner of PwC from time to time, to discuss significant issues.

The Audit, Finance & Risk Committee is also responsible for:

Finance

reviewing the issue of securities by Enbridge and authorizing or recommending such matters to the Board for approval;
overseeing the filing of prospectuses or related documents with securities regulatory authorities; and
overseeing credit facilities and inter-company financing transactions and recommending them to the Board for approval.

Risk management

overseeing the annual review of Enbridge's principal risks;
reviewing risks in conjunction with internal and external auditors;
monitoring our risk management program; and
reviewing our annual report on insurance coverages.

Together with the Board, the committee also reviews with senior management, internal counsel and others as necessary:

our method of reviewing risk and our strategies and practices related to assessing, managing, preventing and mitigating risk; and
loss prevention policies, risk management programs and disaster response and recovery programs.

2012 highlights

The Audit, Finance & Risk Committee carried out the following activities during 2012:

Audits and financial reporting

reviewed the interim and annual MD&A and financial statements and notes and recommended them to the Board for approval;
reviewed public disclosure documents containing audited or unaudited financial information, including annual and interim earnings press releases, prospectuses and the annual information form, and recommended them to the Board for approval for public release;
reviewed and approved the pension plan annual financial statements;
the chair of the Audit, Finance & Risk Committee reviewed and approved the prior year's expenses of the President & Chief Executive Officer;

29      ENBRIDGE INC.


Internal controls

reviewed the quarterly internal controls compliance reports;
reviewed the audit services role and audit plan and received quarterly audit services reports;
reviewed the audit services annual report;
received quarterly updates on the ethics and conduct hotline activity from the Chief Compliance Officer;

External auditors

carried out an assessment of PwC, recommended its appointment by shareholders and reviewed and approved the 2012 engagement letter (including the terms of engagement and proposed fees);
approved a revised policy regarding hiring employees from the external auditor;
pre-approved all non-audit services to be provided by PwC that are allowed under the committee's policy;

Finance

reviewed quarterly treasury management reports;
reviewed the financing plans including additional financing transactions not included in the 2012 annual financing plan, credit facilities and inter-company financing transactions, and recommended them to the Board for approval;

Risk management

reviewed the quarterly financial risk management reports;
reviewed and approved the 2012 corporate risk assessment report;
received information on insurance recoveries from 2010 and 2011 claims;
reviewed the annual report on insurance coverages and reviewed and approved the insurance renewal strategy; and
reviewed the information security report.

Governance

In November 2012, the Audit, Finance & Risk Committee reviewed its terms of reference. The committee reviewed the qualifications of its members, and recommended to the Board members who it believes can be properly considered audit committee financial experts. The committee also reviewed its performance in 2012 and determined that it had fulfilled all of its responsibilities under its terms of reference.

The Audit, Finance & Risk Committee met 10 times in 2012. It held in-camera meetings without management present at each of its regularly scheduled meetings with the senior member of the Internal Audit group as well as with the external auditors and then it met on its own in camera. The Committee spent a considerable amount of time in early 2012 on an investigation of some issues in the subsidiary of one of our sponsored investments, which resulted in an unfavourable prior period adjustment in relation to a natural gas liquids trucking and marketing business. Another area of focus in 2012 was the committee's work related to the effectiveness of strategies to mitigate commodity price risk. From time to time the committee also met in camera with the Chief Financial Officer. Before each meeting, the chair of the committee met with the Chief Financial Officer to discuss the agenda items for the meeting and any significant issues. The chair also met with the senior partner of the external auditors assigned to Enbridge's audit before each meeting. You can find more information about the committee as required under NI 52-110 under Audit, Finance & Risk Committee in our annual information form for the year ended December 31, 2012. Copies are available on our website (www.enbridge.com) and on SEDAR (www.sedar.com). You can also request a copy from the corporate secretary.

Corporate Social Responsibility Committee

Chair:   James Blanchard
Members:   Maureen Kempston Darkes, George Petty and Dan Tutcher

The Corporate Social Responsibility Committee is responsible for assessing our guidelines, policies, procedures and performance related to corporate social responsibility (CSR) and reviewing our reporting in this area.

Assessing CSR guidelines, policies and procedures

The Corporate Social Responsibility Committee is responsible for:

reviewing, approving or recommending to the Board the risk guidelines, policies, procedures and practices relating to CSR matters and approving them or recommending them to the Board for approval. CSR matters include the

2013 Management information circular      30


reviewing and approving our CSR metrics and benchmarks;
reviewing and approving our methods of communicating CSR and related policies;

Monitoring and reporting CSR performance

monitoring our performance on CSR matters and receiving regular compliance reports from management;
reviewing the results of investigations into significant accidents or environmental incidents; and
reporting related to our CSR performance.

The Corporate Social Responsibility Committee has approved the use of the Global Reporting Initiative (GRI) reporting guidelines for monitoring and reporting our sustainability performance.

2012 highlights

The Corporate Social Responsibility Committee carried out the following activities as part of its 2012 work plan:

Assessing CSR guidelines, policies and procedures

received updates on CSR developments (including the environment, health and safety);
received management's reports on:
pipeline security, corporate security and information security; and
public health emergency planning;
discussed our energy4everyone foundation, a foundation created in 2009 to work towards reducing poverty by delivering affordable, reliable and sustainable energy to communities in need;

Reviewing our work with stakeholders

received management's update on the work of the Aboriginal and Stakeholder Relations group;
received management's quarterly updates on our work with governments, regulators and the communities in which we conduct business;
received updates on Northern Gateway including community consultation, Aboriginal engagement, the regulatory process and other matters;
facilitated a meeting of the committee and the Board of Directors with representatives of the proponents of a shareholder proposal submitted at the 2012 annual meeting of shareholders, to discuss issues relating to Northern Gateway;
reviewed progress on Enbridge's neutral footprint strategy;
received reports on community investments, including donations to charitable organizations;

Monitoring and reporting CSR performance

reviewed the 2012 environment, health & safety reports by the Gas Transportation, Liquids Pipelines, Major Projects and Gas Distribution business units;
received information on work planned for 2012 and 2013 to respond to proposed environmental legislation in Canada and the US;
reviewed pipeline integrity issues;
undertook, at the request of the Board, an update of the business units' work on operations risk management issues, including mitigation work on their principal operating risks;
received presentations and reports on the July 2010 oil spill near Marshall, Michigan, the September 2010 oil spill near Romeoville, Illinois and on the community, government relations and pipeline safety and integrity work we have completed and are continuing to work on, following those incidents; and
reviewed our 2012 CSR report, which was prepared using the GRI G3 sustainability reporting guidelines. The GRI guidelines serve as a framework for reporting on an organization's economic, environmental and social performance.

31      ENBRIDGE INC.


Awards and recognition

The Corporate Social Responsibility Committee supports our continuing commitment to CSR initiatives, which has resulted in Enbridge receiving significant positive recognition in recent years, including the following awards in 2012:

Corporate Knights Best 50 Corporate Citizens in Canada;
Corporate Knights Global 100 list of the Most Sustainable Corporations;
Mediacorp Canada's list of Alberta's Top 50 Employers;
Mediacorp Canada's list of Canada's Greenest Employers;
Mediacorp Canada's list of Canada's Top 100 Employers;
Medicorp Canada's list of Canada's Top Employers for Young People; and
Dow Jones Sustainability World and North America Indexes.

Governance

In November 2012, the committee reviewed its terms of reference and determined that it had fulfilled all of its responsibilities under its terms of reference.

The Corporate Social Responsibility Committee met four times in 2012 and held in-camera meetings without management present at the end of each meeting.

Governance Committee

Chair:   Dan Tutcher
Members:   James Blanchard, Lorne Braithwaite and David Leslie

The Governance Committee focuses on ensuring we have a comprehensive system of stewardship and accountability for directors, management and employees that is in the best interests of shareholders.

The Governance Committee is responsible for developing our approach to governance, including the division of duties between the Chair of the Board, directors, the President & Chief Executive Officer and management.

It is responsible for:

recommending matters about overall governance to the Board;
reviewing the terms of reference for the Board and the Board Committees;
setting corporate governance guidelines for the Board; and
reviewing management's compliance reports on corporate governance policies.

The Governance Committee works closely with the Corporate Secretary and other members of management to keep abreast of governance trends and implement board governance best practices.

Board composition, education and evaluation

The Governance Committee is responsible for:

developing a Board composition plan and recommending the nomination of directors to the Board and Board Committees;
establishing formal orientation and education programs for directors;
reviewing and reporting to the Board on risk management matters relating to corporate liability protection programs for directors and officers;
assessing the performance of the Board, Board Committees, the Chair of the Board and individual directors;
monitoring the quality of the relationship among Board members and Board Committees and with management and recommending any changes; and
ensuring the Board functions independently of management.

One of the Governance Committee's objectives is to nominate a balanced mix of members to the Board who have the necessary experience and expertise to make a meaningful contribution in carrying out duties on behalf of the Board. It sets guidelines for recruiting new talent with criteria for relevant expertise, senior management experience or other qualifications, recognizing our diversity goal of having more women and visible minorities on our Board.

2013 Management information circular      32


The Governance Committee manages the annual performance review of the Board. See Board evaluation on page 27 for more information.

Compensation

The Governance Committee is responsible for reviewing and setting directors' compensation. An increase in directors' compensation was approved January 1, 2010 and an increase in the Chair's compensation was approved effective January 1, 2012. See Directors – Compensation discussion and analysis on page 36 for more information.

2012 highlights

The Governance Committee carried out the following activities as part of its 2012 work plan:

reviewed shareholder proposals, proxy voting recommendations and annual meeting voting results for the 2012 meeting;
approved our statement on corporate governance practices for this circular;
reviewed how shareholder engagement and "say on pay" have evolved and agreed to recommend that Enbridge hold a third advisory vote on our approach to executive compensation, at the 2013 shareholders' meeting;
received reports on employee and director compliance with the statement on business conduct;
reviewed the qualifications and independence of all members of the Board;
reviewed management's reports on our director and officer liability protection program and management information systems;

Board composition and evaluation

reviewed the Board composition plan and skills matrix for the current Board and analyzed the implications our strategic plan has on Board composition;
recommended changes in the composition of the Committees, to allow for new contributors to those committees; and
conducted the Board evaluation process for 2012 and reviewed and reported to the Board on the results of the various assessments.

Governance

The Governance Committee reviewed its performance in 2012 and determined that its mandate was appropriate and that the committee had fulfilled all of its responsibilities under its terms of reference.

The Governance Committee met four times in 2012 and held in-camera meetings without management present at the end of each meeting.

Human Resources & Compensation Committee

Chair:   Cathy Williams
Members:   Lorne Braithwaite, Herb England, Charlie Fischer, Maureen Kempston Darkes and Chuck Shultz

The Human Resources & Compensation Committee assists the Board by providing oversight and direction on human resources strategy, policies and programs for the named executives (as defined on page 41 of this circular), senior management and our broader employee base. This includes compensation, pension and benefits as well as talent management, succession planning, workforce recruitment and retention. The Human Resources & Compensation Committee is also responsible for overseeing the company's compensation programs from a risk perspective to ensure they do not encourage individuals to take inappropriate or excessive risks that are reasonably likely to have a material adverse effect on the company.

Succession planning

The Human Resources & Compensation Committee reviews the succession plan for the position of Chief Executive Officer and other key senior officers, and long-range planning for executive development and succession to ensure leadership sustainability and continuity.

33      ENBRIDGE INC.


Every year the Human Resources & Compensation Committee conducts a thorough review of the current succession plan and the status of development and retention plans for candidates who have been identified for senior executive positions, including the position of Chief Executive Officer.

Chief Executive Officer succession has been a significant focus for the Human Resources & Compensation Committee and the Board over the past two years. Having indicated his intent to retire sometime in 2012, Mr. Daniel, as President & Chief Executive Officer, met several times with members of the Human Resources & Compensation Committee, without other members of management, to discuss the transition plan for his successor, then continued to meet with them throughout the transition period to review progress. Later in the year, the Human Resources & Compensation Committee met with the incoming President & Chief Executive Officer, Mr. Monaco, to discuss his views on the executive leadership team and potential succession approaches. The Human Resources & Compensation Committee also met in camera, without Mr. Monaco, to discuss the candidates he had identified as his possible successors.

Given the potential retirement eligibility within the Executive Leadership Team, executive succession and candidate development and retention will continue to be an area of focus for the Human Resources & Compensation Committee and the Board in 2013.

2012 highlights

The Human Resources & Compensation Committee:

worked with the Chair of the Board to finalize the succession plan for the position of President & Chief Executive Officer, considered Mr. Daniel's retirement in 2012, determined the appropriate transition plan, monitored its progress and recommended staged compensation for Mr. Monaco as incoming successor to recognize his appointment to President and then President & Chief Executive Officer;
was asked, on behalf of the Board, to negotiate Mr. Monaco's terms of employment, as the incoming President & Chief Executive Officer. The Human Resources & Compensation Committee retained external advisors (both executive compensation and legal) to assist in this matter and a new executive employment agreement for Mr. Monaco was signed on February 12, 2013, effective October 1, 2012;
reviewed both company and business unit performance, based on the approved short-term incentive performance metrics and corporate financial performance compared to our peers and the TSX60 and TSX Composite Index over several time periods, and used these assessments to determine 2012 short-term, medium-term and long-term incentive awards for our executives and employees;
evaluated Mr. Daniel's (while in the position of Chief Executive Officer) performance and recommended all aspects of his compensation for 2012 to the Board, including his base salary and short-term, medium-term and long-term incentive awards;
reviewed a competitive analysis and Mr. Monaco's performance assessments and compensation recommendations for the other executive officers, including recommendations for their base salaries and short-term, medium-term and long-term incentive awards for 2012;
reviewed and approved the design of the 2012 Performance Stock Option Plan and approved the grant for 2012 – 2016;
reviewed and approved changes to the peer group utilized for executive compensation benchmarking purposes;
reviewed and approved the Compliance and Monitoring Report as part of the pension governance process, including the funding status;
approved the annual general salary increase recommendations;
approved several administrative amendments to the Canadian and US pension plans to align with changes in regulatory wording;
reviewed and approved revisions to the company's Statement of Investment Policies and Procedures based on the results of an Asset Liability Study;
reviewed the succession plans for senior executive roles, discussed development and retention planning for key successors and requested regular progress updates on development plan execution;
recommended officer appointments to the Board for ratification; and
considered compensation risk in the approval of compensation programs, measures and targets.

2013 Management information circular      34


The Human Resources & Compensation Committee also reviewed the strategies and programs designed to attract, develop and retain employees, recognizing our plans for significant growth and increasing levels of retirement eligibility.

Awards and recognition

Enbridge was recognized in 2012 as one of Canada's Top 100 Employers, a Top Employer for Canadians Over 40 and one of Alberta's Top Employers. Enbridge was also named one of Canada's Greenest Employers.

Governance

In November 2012, the Human Resources & Compensation Committee reviewed its mandate, as set out in its terms of reference, and its performance. The members of the committee are satisfied that the mandate is appropriate and that it met its responsibilities in 2012. The Committee made several clarifying additions to its terms of reference to more fully reflect the Committee's full range of responsibilities.

The Human Resources & Compensation Committee met six times in 2012, and held an in camera meeting, without management present, at the end of each meeting.

35      ENBRIDGE INC.


3.        Compensation

This next section discusses director and executive compensation at Enbridge, including our decision-making process, pay for performance, share ownership requirements and 2012 pay decisions.

DIRECTORS

COMPENSATION DISCUSSION AND ANALYSIS

Philosophy and approach

The Board is responsible for developing and implementing the directors' compensation plan and has delegated the day-to-day responsibility for director compensation to the Governance Committee.

Our directors' compensation plan is designed with four key objectives in mind:

to attract and retain the most qualified individuals to serve as directors;
to compensate our directors to reflect the risks and responsibilities they assume when serving on our Board and Board Committees;
to offer directors compensation that is competitive with other public companies that are comparable to Enbridge; and
to align the interests of directors with those of our shareholders.

While our executive compensation program is designed around pay for performance, director compensation is based on annual retainers. This is to meet the compensation objectives and to help ensure our directors are unbiased when making decisions and carrying out their duties while serving on our Board.

The Governance Committee uses a peer group of companies to set the annual retainers for our Board and targets director compensation at about the 75th percentile. It uses the same peer group, as much as possible, to determine executive compensation. See page 46 for more information about our peer group and how we benchmark executive compensation.

The Governance Committee reviews the compensation plan every year and works with external consultants as needed. As part of this review, the committee considers the time commitment and experience required of members of our Board and the director compensation paid by a group of comparable public companies when it sets the compensation. The committee also reviews the compensation plan to make sure the overall program is still appropriate and reports its findings to the Board.

Share ownership

We expect directors to own Enbridge shares so they have an ongoing stake in the company and are aligned with the interests of shareholders. The ownership guideline changed from two times to three times the annual Board retainer effective January 1, 2013. Directors must now hold at least three times their annual Board retainer, or $630,000, in DSUs or Enbridge shares and meet that requirement within five years of becoming a director on our Board. DSUs are paid out when a director retires from the Board. They are redeemed for cash, based on the weighted average of the closing price of common shares on the TSX for the last five trading days before the redemption date, multiplied by the number of DSUs the director holds.

If a decrease in the market value of our common shares results in a director no longer meeting the share ownership requirements, we expect him or her to buy additional common shares in order to satisfy the minimum threshold.
 


About DSUs

A deferred share unit (
DSU) is a notional share that has the same value as one Enbridge common share. Its value fluctuates with variations in the market price of Enbridge shares.

DSUs do not having voting rights but they accrue dividends as additional DSUs, at the same rate as dividends paid on our common shares.


2013 Management information circular      36


Components

Our Directors' compensation plan has four components:

an annual retainer;
an annual fee if he or she serves as the non-executive Chair of the Board or chair of a Board Committee;
a travel fee for attending Board and Board Committee meetings; and
reimbursement for reasonable travel and other out-of-pocket expenses relating to his or her duties as a director.

We do not have meeting attendance fees.

This plan has been in effect since 2004 and was revised in January 2010 when the Board approved an increase in the annual retainer. The Chair's retainer was increased by $20,000 effective January 1, 2012. The table below shows the fee schedule for directors in 2012. Directors are paid quarterly. If their principal residence is in the US, they receive the same face amounts in US dollars. Mr. Monaco joined the Board on February 27, 2012. He does not receive any director compensation because he is our President & Chief Executive Officer and is compensated in that role. Mr. Patrick Daniel, the previous President & Chief Executive Officer, also did not receive directors' fees.

Directors who also serve as a director or trustee of one of our subsidiaries or affiliates also receive an annual retainer and meeting and travel fees for attending those meetings.

Directors can receive their retainer in a combination of cash, Enbridge shares and DSUs, but they must receive a minimum amount in DSUs, as shown in the table below. Travel fees are always paid in cash.

 
   
   
   
   
   
   
   
 

    Annual
amount
($)
  Cash   Enbridge
shares
  DSUs   Cash   Enbridge
shares
  DSUs  


Compensation component
 
before minimum share ownership
 
after minimum share ownership
 

Board retainer   210,000                          

                         
Additional retainers                              
Chair of the Board retainer   260,000                          
Board Committee chair retainer       Up to 50%   Up to 50%   50% to 100%   Up to 75%   Up to 75%   25% to 100%  
– Audit, Finance & Risk   25,000                          
– Corporate Social Responsibility   10,000                          
– Governance   10,000                          
– Human Resources & Compensation   15,000                          

Travel fee   1,500   100%       100%      

Once they reach the minimum share ownership level, directors can choose to receive between one quarter and all of their retainer in DSUs, with the balance in cash, Enbridge shares or a combination of both, according to a percentage mix they choose. They must take at least 25% of the retainer in DSUs. Directors are allocated the Enbridge shares based on the weighted average of the closing price of the Enbridge shares on the TSX for the five trading days immediately preceding the date that is two weeks prior to the date of payment.

The table below shows the breakdown of each director's annual retainer for the year ended December 31, 2012.


  Director   Cash
(%)
  Enbridge shares
(%)
  DSUs
(%)
 

David A. Arledge   75     25  
James J. Blanchard   50     50  
J. Lorne Braithwaite   50   25   25  
Patrick D. Daniel1        

37      ENBRIDGE INC.


J. Herb England   50     50  
Charles W. Fischer   50     50  
V. Maureen Kempston Darkes   25   50   25  
David A. Leslie       100  
Al Monaco2        

George K. Petty   75     25  
Charles E. Shultz   25   50   25  
Dan C. Tutcher       100  
Catherine L. Williams     50   50  

1
Mr. Daniel retired as Chief Executive Officer and from the Board effective September 30, 2012. He did not receive any compensation as a director of Enbridge because he was our Chief Executive Officer.
2
Mr. Monaco joined the Board on February 27, 2012 when he became President of Enbridge. He does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.

2012 RESULTS

Summary compensation table

The table below shows the total compensation paid to or accrued by our directors for the year ended December 31, 2011. All Enbridge shares and DSUs vested at the time of the grant.

 
 
   
   
   
   
 
   
   
   
   
 
 
 

      Share-based awards2     All other compensation      
     
   

 

Fees
earned1

 

Enbridge shares3,4


 

DSUs4


 

 

Subsidiary
fees5

 

Travel
fees

 

Dividends on DSUs6


Total

 
  Director1 (cash) ($)   (#)   ($)   (#)     ($)     ($)   ($)   (#)   ($)   ($)  

David A. Arledge7
James J. Blanchard7
352,500
105,000
 
 
  2,961
2,898
  117,500
115,000
   
  9,000
9,000
  33
33
  1,284
1,256
  480,284
230,256
 

J. Lorne Braithwaite
Patrick D. Daniel8
105,091
  1,330
  52,409
  1,332
  52,500
    23,000
  11,000
  15
  577
  244,577
 

J. Herb England7
Charles W. Fischer
105,000
105,000
 
 
  2,646
2,665
  105,000
105,000
    153,831
61,250
  21,000
6,000
  30
30
  1,147 1,155   385,978
278,405
 

V. Maureen Kempston Darkes 52,601   2,662   104,899   1,332   52,500       9,000   15   577   219,577  

David A. Leslie
Al Monaco9

 
 
  5,964
  235,000
    26,000
  11,000
  67
  2,585
  274,585
 

George K. Petty7 157,500       1,347   53,438       10,500   15   592   222,030  
Charles E. Shultz 52,601   2,662   104,899   1,332   52,500     6,750   9,000   15   577   226,327  

Dan C. Tutcher7       5,448   216,250       9,000   60   2,330   227,580  

Catherine L. Williams 75   2,853   112,425   2,855   112,500     6,750   4,500   32   1,237   237,487  

1
The cash portion of the retainers paid to the directors.
2
The portion of the retainer received as DSUs and Enbridge shares.
3
Directors may also receive additional Enbridge shares as part of our Dividend Reinvestment and Share Purchase Plan, which is available to all shareholders.
4
We pay directors quarterly. The value of the Enbridge shares and DSUs is based on the weighted average of the closing price of Enbridge shares on the TSX for the five trading days immediately preceding the grant date each quarter. The weighted average Enbridge share prices were $38.47, $39.24, $38.39 and $41.70 for the first, second, third and fourth quarters of 2012.
5
Includes the annual retainers paid to each of Ms. Williams and Messrs. Braithwaite, England, Fischer, Leslie and Shultz as a director or trustee of an Enbridge subsidiary or affiliate, and fees for attending those meetings.
6
Includes dividend equivalents granted in 2012 on DSUs granted in 2012 based on the 2012 quarterly dividend rate of $0.2825. Dividend equivalents vest at the time of grant.
7
These directors are paid the same face amounts in US$ because their principal residence is in the US.
8
Mr. Daniel retired as Chief Executive Officer and from the Board effective September 30, 2012. He did not receive any compensation as a director of Enbridge because he was our Chief Executive Officer.
9
Mr. Monaco joined the Board on February 27, 2012 when he became President of Enbridge. He does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.

Incentive plans awards

We have not granted stock options (stock options or options) to directors since 2002. None of our non-employee directors hold any share-based awards that have not vested.

2013 Management information circular      38


Share-based compensation

The table below shows the breakdown in share-based compensation each director received each quarter in 2012.

 
   
   
   
   
   
   
   
   
   
   
   
   
 

    Q1   Q2   Q3   Q4  

  Director   Enbridge
Shares1
 
DSUs1
  Dividends on
2012 DSUs1
  Enbridge
Shares1
  DSUs1   Dividends on
2012 DSUs1
  Enbridge
Shares1
  DSUs1   Dividends on
2012 DSUs1
  Enbridge
Shares1
  DSUs1   Dividends on
2012 DSUs1
 

David A. Arledge2     $29,122       $30,092   $214     $28,523   $432     $28,964   $645  
        (757 units)           (757 units/5 units)       (743 units/11 units)       (695 units/17 units)  

James J. Blanchard2     $28,503       $29,452   $209     $27,916   $423     $28,348   $631  
        (740 units)           (751 units/5 units)       (727 units/11 units)       (680 units/16 units)  

J. Lorne Braithwaite   $13,118   $13,125     $13,106   $13,125   $96   $13,091   $13,125   $192   $13,094   $13,125   $290  
    (341 Enbridge shares)   (341 units)       (334 Enbridge shares)   (334 units/2 units)   (341 Enbridge shares)   (342 units/5 units)   (314 Enbridge shares)   (315 units/7 units)  

Patrick D. Daniel3                          

J. Herb
England2
    $26,024       $26,891   $191     $25,489   $386     $25,883   $576  
        (676 units)           (685 units/5 units)       (664 units/10 units)       (620 units/15 units)  

Charles W. Fischer     $26,250       $26,250   $193     $26,250   $383     $26,250   $579  
        (682 units)           (669 units/5 units)       (684 units/10 units)       (629 units/15 units)  

V. Maureen Kempston Darkes   $26,237   $13,125     $26,212   $13,125   $96   $26,220   $13,125   $192   $26,229   $13,125   $290  
    (682 Enbridge Shares)   (341 units)       (668 Enbridge Shares)   (334 units/2 units)   (683 Enbridge Shares)   (342 units/5 units)   (629 Enbridge Shares)   (315 units/7 units)  

David A.
Leslie
    $58,750       $58,750   $431     $58,750   $857     $58,750   $1,296  
        (1,527 units)           (1,497 units/10 units)       (1,530 units/22 units)       (1,409 units/33 units)  

Al Monaco4                          

George K. Petty2     $13,632       $13,765   $100     $12,744   $200     $12,941   $295  
        (354 units)           (351 units/2 units)       (332 units/5 units)       (310 units/8 units)  

Charles E. Shultz   $26,237   $13,125     $26,212   $13,125   $96   $26,220   $13,125   $192   $26,229   $13,125   $290  
    (682 Enbridge shares)   (341 units)       (668 Enbridge shares)   (334 units/2 units)   (683 Enbridge shares)   (342 units/5 units)   (629 Enbridge shares)   (315 units/7 units)  

Dan C. Tutcher2     $52,049       $55,062   $382     $53,405   $781     $54,230   $1,180  
        (1,353 units)           (1,403 units/10 units)       (1,391 units/20 units)       (1,300 units/30 units)  

Catherine L. Williams   $28,122   $28,125     $28,096   $28,125   $206   $28,101   $28,125   $410   $28,106   $28,125   $620  
    (731 Enbridge shares)   (731 units)       (716 Enbridge shares)   (717 units/5 units)   (732 Enbridge shares)   (733 units/10 units)   (674 Enbridge shares)   (674 units/16 units)  

1
Directors are paid in Enbridge shares and DSUs quarterly. Their value is based on the weighted average of the closing price of the Enbridge shares on the TSX for the five trading days immediately preceding the grant date each quarter. DSUs dividends paid in 2012 on DSUs granted in 2012 are valued as of March 1, June 1, September 4 and December 3, 2012. The table below shows the grant dates, dividend dates and the weighted average Enbridge share price for each quarter in 2012.

  Quarter   DSU grant date   Dividend date   Weighted average
Enbridge share price
for dividend grant
  Weighted average
Enbridge share price
for DSU grant
 

Q1   March 16, 2012   March 1, 2012   $37.62   $38.47  
Q2   June 15, 2012   June 1, 2012   39.88   39.24  
Q3   September 14, 2012   September 4, 2012   38.21   38.39  
Q4   December 14, 2012   December 3, 2012   38.99   41.70  

2
These directors are paid in US$. The amounts they received have been converted to CA$ based on the Bank of Canada noon rate:
March 16, 2012: US$1 = CA$0.9914
June 15, 2012: US$1 = CA$1.0244
September 14, 2012: US$1 = CA$0.9710
December 14, 2012: US$1 = CA$0.986
3
Mr. Daniel retired as Chief Executive Officer and from the Board effective September 30, 2012. He did not receive any compensation as a director of Enbridge because he was our Chief Executive Officer.
4
Mr. Monaco joined the Board on February 27, 2012 when he became President of Enbridge. He does not receive any compensation as a director of Enbridge because he is our President & Chief Executive Officer.

39      ENBRIDGE INC.


Change in equity ownership

The table below shows the change in each director's equity ownership from March 2, 2012 to March 5, 2013 and his or her status in meeting the share ownership requirements. Mr. Daniel is excluded because he retired as Chief Executive Officer and Director effective September 30, 2012.


  Director Enbridge
shares
(#)
  Enbridge
stock
options
(#)
  DSUs
(#)
  Total
Enbridge
shares and
DSUs
(#)
  Market
(at-risk)
value
of equity
holdings
($)1
  Minimum
share
ownership
required2,3
($)
  Current
holdings as a
multiple of the
Board retainer
 

David A. Arledge                            
2013 32,600     43,511   76,111   3,492,734   630,000   16.63  
2012 32,600     39,348   71,948   2,754,889   420,000      
Change 0     4,163   4,163   737,845          

James J. Blanchard                            
2013 10,977     94,563   105,540   4,843,231   630,000   23.06  
2012 25,770     89,016   114,786   4,395,156   420,000      
Change (14,793 )   5,547   (9,246 ) 448,075          

J. Lorne Braithwaite                            
2013 86,090     36,336   122,426   5,618,129   630,000   26.75  
2012 84,760     33,989   118,749   4,546,899   420,000      
Change 1,330     2,347   3,677   1,071,230          

J. Herb England                            
2013 2,120     43,305   45,425   2,084,553   630,000   9.93  
2012 2,120     39,460   41,580   1,592,098   420,000      
Change 0     3,845   3,845   492,455          

Charles W. Fischer                            
2013 8,000     12,922   20,922   960,111   630,000   4.57  
2012 8,000     9,919   17,919   686,119   420,000      
Change 0     3,003   3,003   273,992          

V. Maureen Kempston Darkes                            
2013 12,705     9,682   22,387   1,027,339   630,000   4.89  
2012 10,000     8,089   18,089   692,628   420,000      
Change 2,705     1,593   4,298   334,711          

David A. Leslie                            
2013 10,456     45,722   56,178   2,578,008   630,000   12.28  
2012 10,179     38,526   48,705   1,864,914   420,000      
Change 277     7,196   7,473   713,094          

Al Monaco3                            
2013 118,596   2,458,700     118,596   5,442,370      
2012 96,303   1,170,900     96,303   3,687,442      
Change 22,293   1,287,800     22,293   1,754,928          

George K. Petty                            
2013 1,894     50,220   52,114   2,391,511   630,000   11.39  
2012 26,594     47,464   74,058   2,835,681   420,000      
Change (24,700 )   2,756   (21,944 ) (444,170 )        

Charles E. Shultz                            
2013 31,657     37,454   69,111   3,171,504   630,000   15.10  
2012 28,466     35,075   63,541   2,432,985   420,000      
Change 3,191     2,379   5,570   738,519          

Dan C. Tutcher                            
2013 630,711     49,766   680,447   31,227,090   630,000   148.70  
2012 616,856     42,966   659,822   25,264,584   420,000      
Change 13,855     6,800   20,655   5,962,506          

2013 Management information circular      40



  Director Enbridge
shares
(#)
  Enbridge
stock
options
(#)
  DSUs
(#)
  Total
Enbridge
shares and
DSUs
(#)
  Market
(at-risk)
value
of equity
holdings
($)1
  Minimum
share
ownership
required2,3
($)
  Current
holdings as a
multiple of the
Board retainer
 

Catherine L. Williams                            
2013 28,841     22,066   50,907   2,336,122   630,000   11.12  
2012 25,394     18,616   44,010   1,685,143   420,000      
Change 3,447     3,450   6,897   650,979          

Total                            
2013 974,647   2,458,700   445,547   1,420,194   65,172,703          
2012 967,042   1,170,900   402,468   1,369,510   52,438,538          
Change 7,605   1,287,800   43,079   50,684   12,734,165          

1
Based on the total market value of Enbridge shares and/or DSUs owned by the director, based on the closing price of $38.29 on the TSX on March 2, 2012 and $45.89 on March 5, 2013. These amounts have been rounded to the nearest dollar. Excludes stock options.
2
Each Director met the share ownership guideline by or before the applicable deadline and now exceeds that share ownership guideline. The ownership guideline changed from two times to three times the Board retainer effective January 1, 2013. The Board retainer is $210,000.
3
Mr. Monaco joined the Board on February 27, 2012. He does not receive any compensation as a director of Enbridge. He is only compensated for his role as President & Chief Executive Officer. He is required to hold at least five times his base salary in Enbridge shares. Please see page 47 of this circular for information on his Enbridge share ownership as a multiple of his base salary.

EXECUTIVES

COMPENSATION DISCUSSION AND ANALYSIS

Named executive officers

For 2012, the Enbridge named executives include the following individuals:

Patrick D. Daniel, former President & Chief Executive Officer;
Al Monaco, current President & Chief Executive Officer;
J. Richard Bird, Executive Vice President, Chief Financial Officer & Corporate Development;
Stephen J. Wuori, President, Liquids Pipelines & Major Projects;
David T. Robottom, Executive Vice President & Chief Legal Officer; and
Janet A. Holder, Executive Vice President, Western Access.

Executive summary

Key developments in 2012

Chief Executive Officer succession has been a significant focus for the Human Resources and Compensation Committee (HRC Committee) and the Board over the past two years, including a review of potential internal and external succession candidates. In February 2012, Mr. Daniel, as President & Chief Executive Officer, provided formal notice to the Board of Directors of his intention to retire on or before the end of 2012. The Board of Directors, in consultation with the chair of the HRC Committee, confirmed previous discussions on succession plans and candidates which resulted in the appointment of Mr. Monaco to President of Enbridge and a member of the Board of Directors effective February 27, 2012. After working with Mr. Daniel to determine an appropriate transition plan, the HRC Committee continued to meet throughout the transition period to monitor progress. Mr. Daniel retired effective September 30, 2012. The Board of Directors appointed Mr. Monaco to President & Chief Executive Officer effective October 1, 2012.

As part of the transition plan, Enbridge expanded the portfolios of responsibilities of Messrs. Bird and Wuori, with each taking on some of the responsibilities previously held by Mr. Monaco.

Performance highlights for 2012

The following summarizes some our key accomplishments in 2012:

reinforced safety and operational integrity through a comprehensive operational risk management assessment and planning initiative;

41      ENBRIDGE INC.


achieved strong earnings and cash flow growth with adjusted earnings per share (EPS) rising 11%;
increased our quarterly dividend by 12% effective March 1, 2013;
generated total shareholder return for 2012 of 16.2%;
added a total of $14 billion to our portfolio of commercially secured growth projects;
reached a 52-week trading high of $43.05 on the TSX on December 31st, and closed the year at $43.02; and
received recognition for corporate social responsibility and sustainability practices, including being named one of Canada's Greenest Employers and a Top 100 Employer.

Pay for performance

In making decisions on performance-based compensation in 2012, the HRC Committee considered the strong financial growth the company achieved and the notable operational successes across the business units. In addition, the HRC Committee considered Enbridge's significant outperformance over our competitors on other key performance indicators such as dividend per share growth, reward to risk ratio and total shareholder return. Taking into account these circumstances, total annual cash compensation increased by 3% for the named executives of 2012 versus the named executive officers of last year (the 3% increase includes the addition of Ms. Holder to the list of named executive officers of 2012). These increases were in part due to significant base salary increases for Mr. Monaco when he was promoted to President and later to Chief Executive Officer and increases for Messrs. Bird and Wuori to recognize their increased responsibilities.

Awards under our medium and long-term incentive plans are generally targeted at the median of our peer group with the opportunity to realize a greater or lesser value depending on how Enbridge performs in the future. In addition to time-vesting provisions, the performance stock units have EPS and price-to-earnings (P/E) performance conditions and the performance stock options have three share price targets that must be met within a specified time period for the options to vest. Incentive stock options round out the long-term incentive plans and are an additional way to increase executives' equity stake in the company and align management interests with those of shareholders.

Key compensation decisions in 2012

The Board and the HRC Committee are responsible for overseeing the compensation principles and programs at Enbridge and approving compensation programs and payouts with assistance from independent outside advisers. In 2012, the following key compensation decisions were made:

developed a staged compensation plan for Mr. Monaco as incoming successor to recognize his appointment to President and then President & Chief Executive Officer;
increased the share ownership guidelines for the President & Chief Executive Officer position from 4 times to 5 times base salary;
negotiated Mr. Monaco's terms of employment which became effective October 1, 2012;
adjusted the base salaries and total compensation for Messrs. Bird and Wuori to reflect their expanded portfolios of responsibilities;
determined appropriate post-retirement vesting provisions for the 2012 long-term incentive awards for the retiring President & Chief Executive Officer;
reviewed and revised the peer groups used to benchmark named executives' compensation;
approved the design and implementation of the 2012 performance stock option plan; and
approved an adjustment to the calculated EPS for the 2012 short-term incentive plan to offset the negative short-term impact of the successful pre-funding actions on our 2012 EPS.

Compensation philosophy

Enbridge's vision is to be the leading energy delivery company in North America. While we may be viewed as having achieved elements of this vision, enhancing and sustaining this position remains a continuing long-term pursuit.

Operational performance is the cornerstone of assessing our performance as an organization. At Enbridge, operational performance covers personal, public and process safety, system reliability and environmental performance. Our goal is industry leadership in these areas and enhancing and promoting a culture of leading operational performance is a critical component in achieving this success. To reinforce this, employees at all levels (including all our named

2013 Management information circular      42



executives) have a direct linkage between operational performance and their short-term incentive awards, whether they are in a corporate or business unit role.

Our executive compensation programs are designed to motivate management to deliver exceptional value to shareholders through strong corporate performance and investing our capital in ways that minimize risk and maximize return, while always supporting our core business goal of delivering energy safely and reliably. Consistently applied, such stewardship should continue to generate attractive, risk adjusted returns and, in turn, provide for consistent and growing dividend distributions and related capital appreciation. Management has the commitment to shareholders to deliver steady, visible and predictable results in the short term and to operate our assets in a responsible manner.

The compensation programs at Enbridge reflect a blend of short, medium and long-term incentive awards to support our pay for performance philosophy (meaning there is a direct linkage between results and rewards). Relevant corporate and business unit performance measures are established for the short-term compensation plan that focus on the critical safety, system reliability, environmental and financial aspects of the business. The performance measures for the medium and long-term plans focus on overall corporate performance aligned with shareholder expectations for earnings growth and share price appreciation.

When assessing performance, the HRC Committee takes into consideration both the objective pre-defined performance metrics as well as qualitative factors not captured in the formal metrics. For example, a decision to complete a certain acquisition may have longer-term strategic benefits to the company which may not be reflected in the short-term performance metrics. Also playing a role are a number of market-based and earnings-based key performance indicators that compare Enbridge's results to a peer group and to the broader market over a one to 10 year time horizon. Therefore, the assessment of overall performance is based on a combination of the pre-defined performance metrics, the key performance indicators, as well as the qualitative aspects of management's responsibilities.

Compensation governance

Our compensation governance structure consists of the Board and the HRC Committee, with Mercer (Canada) Limited (Mercer), providing independent advisory support. The governance structure is reviewed regularly against best practices and regulatory guidance.

The Board is responsible for the oversight of the compensation principles and programs at Enbridge. The Board approves major compensation programs and payouts, including the compensation for the Chief Executive Officer. The HRC Committee approves the compensation for the other named executives.

The HRC Committee assists the Board in carrying out its responsibilities with respect to compensation matters by:

providing oversight and direction on human resources strategy, policies and programs for the named executives, senior management and our broader employee base, including compensation, pension and benefits as well as talent management, succession planning, workforce recruitment and retention;
ensuring the design of compensation programs and payouts align with sound risk management principles and practices and ensuring our management programs effectively address succession planning and employee retention;
reviewing and approving key financial, risk, strategic and operational objectives relevant to the compensation of the Chief Executive Officer and annually recommending the Chief Executive Officer's compensation to the Board, following an evaluation of the Chief Executive Officer's performance against these objectives;
approving the compensation of the named executives, following a review of their performance assessments and compensation recommendations provided by the Chief Executive Officer; and
reviewing the succession plan for the Chief Executive Officer and other key senior officers and long-range planning for executive development and succession to ensure leadership sustainability and continuity.

43      ENBRIDGE INC.


All members of the HRC Committee are independent under the independence standard discussed on page 25 of this circular. All members of the HRC Committee are knowledgeable and experienced individuals who have the necessary background in executive compensation to fulfill the HRC Committee's obligations to the Board and to our shareholders. Most members of the HRC Committee have significant experience as senior leaders of large organizations and have been long-standing members of Enbridge's HRC Committee or the members of the compensation committees of other large organizations. Their experience and skill levels are broad-based and include expertise in areas such as finance, mergers and acquisitions, governance, human resource management and business management. A variety of industry experience is represented with significant knowledge of the energy and oil and gas sectors. The chair of the HRC Committee is an audit committee financial expert as that term is defined by the US Securities Exchange Act of 1934 and also sits on our Audit, Finance & Risk Committee, along with three other members of the HCR Committee.

The members of our HRC Committee are Catherine L. Williams (chair), J. Lorne Braithwaite, J. Herb England, Charles W. Fischer, V. Maureen Kempston Darkes and Charles E. Shultz. For information on their Board Committee participation, please refer to page 15 of this circular.

Independent advice

Since 2002, Mercer, an independent compensation consultant, has advised the HRC Committee on compensation matters to ensure our programs are appropriate, market-competitive and continue to meet our intended goals. Advisory services include:

the competitiveness and appropriateness of our executive compensation programs;
annual total direct compensation for the President & Chief Executive Officer and his Executive Leadership Team;
governance of executive compensation; and
the HRC Committee's mandate and related Board Committee processes.

The HRC Committee chair reviews and approves our terms of engagement with Mercer every year. The terms specify the work to be done in the year, Mercer's responsibilities and its fees. Any other projects must be approved by the HRC Committee chair. Management can also retain Mercer on compensation matters from time to time. The chair of the HRC Committee must approve all services over $10,000. Management engages Mercer to provide assistance in compensation areas including:

competitive review of our various pension and benefit programs;
actuarial valuations of our defined benefit pension plans; and
renewal and pricing of our benefits plans.

While the HRC Committee takes the information and recommendations Mercer provides into consideration, it has full responsibility for its own decisions, which may reflect other factors and considerations.

Management and the HRC Committee engaged Mercer in 2012 to provide analysis and advice on various compensation matters. The following table provides a breakdown of services provided and fees paid to Mercer and all of its affiliates by Enbridge and all of its affiliates in 2012 and 2011:


  Nature of work   Approximate fees 2012 ($)   Approximate fees 2011 ($)  

Executive Compensation-Related Fees1   348,166   233,366  

All other Fees2   3,784,927   2,921,208  

Total   4,133,093   3,154,574  

1
Includes all compensation-related fees related to executive compensation associated with the Chief Executive Officer and his Executive Leadership Team. Additional services were provided in 2012 to support the Chief Executive Officer transition and the performance stock option grant.
2
Includes fees paid for other compensation matters that apply to the organization as a whole, such as pension actuarial valuations, renewal and pricing of benefit plans, and evaluating geographic market differences. Also includes risk brokerage service fees ($1,367,752 in 2012 and $578,186 in 2011) paid to Marsh Inc., a Mercer affiliate, for services provided to our operating affiliates.

With the retirement of Mr. Daniel and the appointment of Mr. Monaco as President & Chief Executive Officer, Hugessen Consulting was engaged to assist the HRC Committee in the development of a new Chief Executive Officer contract by providing an assessment of current best practices from a governance and risk perspective. This was a

2013 Management information circular      44



specific piece of research that was presented and discussed with the HRC Committee. The total fees for this engagement were $48,895. There were no other services provided by Hugessen Consulting to Enbridge during 2012.

Risk management

Enbridge is committed to ensuring that our compensation programs and policies are aligned with the long-term objectives of our shareholders. To accomplish this, we incorporate general risk management principles into all decision making processes across the organization and we regularly review our executive compensation programs through third party compensation consultants. This integration and review procedure helps ensure that our programs continue to support shareholder interests and regulatory compliance and are aligned with sound principles of risk management and governance.

The HRC Committee oversees the company's compensation programs from the perspective of whether they encourage individuals to take inappropriate or excessive risks that are reasonably likely to have a material adverse effect on the company.

The company uses the following compensation practices to mitigate risk:

we have a pay for performance philosophy that is embedded into our compensation design;
we believe our mix of pay programs, our approach to goal setting, establishing targets with multiple levels of performance and evaluation of performance results assist us in mitigating excessive risk-taking that could harm our value or reward poor judgment of our executives;
our compensation programs include a combination of short, medium and long-term elements that ensure our executives have the incentive to consider both the immediate and long-term implications of their decisions;
executives are compensated for their short-term performance using a combination of safety, system reliability, environmental, financial and customer and employee metrics that ensure a balanced perspective and are a mix of both leading and lagging indicators;
performance thresholds are established that include both minimum and maximum payouts;
stock award programs vest over multiple years and are aligned to overall corporate performance that drives superior value to shareholders; and
share ownership guidelines ensure executives have a meaningful equity stake in the company and align their interests with those of shareholders.

The HRC Committee has discussed the concept of risk as it relates to our compensation programs and does not believe our programs encourage excessive or inappropriate risk taking.

Clawback policy

The Board of Directors is in the process of establishing a policy that will enable it to recover, from current and former executives, certain incentive compensation amounts that were awarded or paid to such individuals based upon the achievement of financial results that are subsequently materially restated or corrected, in whole or in part, if such individuals engaged in fraud or willful misconduct that resulted in the need for such restatement or correction and it is determined that the incentive compensation paid to the individuals would have been lower based on the restated or corrected results. The Board expects this policy to be in place by the end of the first half of 2013.

Hedging policy

Our insider trading and reporting guidelines, among other things, prohibit directors, officers and employees from engaging in the following, in respect of any securities of Enbridge or its subsidiaries:

any form of hedging activity;
any form of transaction of options (other than exercising options in accordance with the plans);
any other form of derivative (including "puts" and "calls"); and
"short selling" (selling securities that he or she does not own).

We provide incentive benefits to some of our officers and employees to voluntarily acquire Enbridge securities as a long term incentive to align the commitment, interests and day-to-day activities and performance of those persons with the

45      ENBRIDGE INC.



long term interests of Enbridge and its shareholders. Speculating in securities of Enbridge or its subsidiaries or taking derivative positions which delink the intended alignment of interests is prohibited.

Approach to executive compensation

Our approach to executive compensation is set by the HRC Committee and approved by the Board. Our programs are designed to accomplish three things:

attract and retain a highly effective executive team;
align their actions with our business strategy and the interests of our shareholders; and
reward them for short, medium and long-term performance.

Benchmarking to peers

We benchmark our executive compensation programs against a group of similar companies in Canada and the US to ensure we are rewarding our executives at a competitive level.

In 2012, the HRC Committee engaged Mercer to undertake a review of the peer companies utilized for executive compensation benchmarking purposes, to ensure their continued appropriateness as Enbridge has experienced significant growth in recent years. As a result, several adjustments were made to both the Canadian and US peer groups.

The Canadian companies identified are large pipeline, energy, utility and railway companies that are similar to us in size, utilizing assessments of enterprise value and revenues, and in risk profile. Together they reflect the Canadian business environment that we operate in.

The US companies are mainly oil and gas pipelines and utilities because the US energy sector is much larger and has more depth than Canada's.

Peer group


  Canada   US  

Canadian National Railway Company   Consolidated Edison, Inc.*  
Canadian Natural Resources Limited*   Dominion Resources, Inc.*  
Canadian Pacific Railway Limited   Duke Energy Corporation*  
Cenovus Energy Inc.*   Energy Transfer Partners, L.P.*  

Encana Corporation*   Enterprise Products Partners L.P.*  
Husky Energy Inc.   Exelon Corporation*  
Imperial Oil Limited*   Kinder Morgan, Inc.*  
Nexen Inc.   Nextera Energy, Inc.*  

Suncor Energy Inc.   Plains All American Pipeline, L.P.*  
Talisman Energy Inc.   PG&E Corporation  
TransCanada Corporation   PPL Corporation  
    Sempra Energy  

    The Southern Company*  
    Spectra Energy Corp  
    The Williams Companies, Inc.  

*
New for 2012

We believe this new group of peer companies better aligns with an enterprise value and other comparative purposes.

How we compare


    Canada   US  

Enterprise value   Above 75th percentile   Between 50th and 75th percentile  

Revenue   At 75th percentile   Above 75th percentile  

Total assets   Between 50th and 75th percentile   Between 25th and 50th percentile  

Number of employees   Between 50th and 75th percentile   Between 25th and 50th percentile  

Market capitalization1   Between 50th and 75th percentile   Above 75th percentile  

1
As of September 30, 2012. All other information is based on most recently reported data.

2013 Management information circular      46


Setting compensation targets

Although we target overall total compensation at the 50th percentile, we establish base pay between the median and the 75th percentile, considering the skill, competency and experience of each senior executive. Executives who are demonstrating superior performance and consistently achieving significant results have their base pay aligned at the higher end of the percentile range. We link targets for short, medium and long-term incentives to base salary levels.

For each of the named executives, we target total direct compensation at the median of our comparator companies in North America. Actual total direct compensation depends on performance. The responsibilities of our named executives are North American in scope, therefore, we weight the Canadian and US peer groups equally.

At risk compensation

The graphs below show the compensation mix for our current President & Chief Executive Officer and an average for our other named executives. The short, medium and long-term incentives are considered to be at risk because their value is based on performance and is not guaranteed. In 2012, 90% of the target total direct compensation for the current President & Chief Executive Officer and an average of 85% for the other named executives was at risk, directly aligning corporate, business unit and individual performance with the interests of shareholders. The at risk component of compensation increased in 2012 over 2011 because of the 2012 grant of performance stock options (a 5-year grant covering the period of 2012 – 2016). Please see page 41 for a list of the named executives.

President & Chief Executive Officer   Average for Other Named Executives

GRAPHIC

 

GRAPHIC

Share ownership

It is important for all of our officers, including executives, to have a meaningful equity stake in the company. Owning Enbridge shares is a tangible way to align the interests of our officers with those of our shareholders.

Target ownership is a multiple of base salary, depending on position level, and officers are required to meet the target within four years of being appointed to the position. Officers can acquire Enbridge shares by participating in the employee savings plan, exercising stock options or by making personal investments in Enbridge common shares. Personal holdings, or Enbridge shares held in the name of a spouse, dependent child or trust, all count toward meeting the guidelines. Stock options do not count towards meeting the guidelines.

  Target and actual share ownership as of December 31, 2012      

  Executive   Target ownership   Actual ownership   Meets
requirements
 

Patrick D. Daniel1   4x base salary   46x base salary   Yes  

Al Monaco2   5x   5x   Yes  

J. Richard Bird   2x   16x   Yes  

Stephen J. Wuori   2x   16x   Yes  

David T. Robottom   2x   5x   Yes  

Janet Holder   2x   6x   Yes  

1
Mr. Daniel retired as Chief Executive Officer effective September 30, 2012. His target and actual ownership are shown as at that date.
2
Mr. Monaco's target ownership increased from 2x base salary to 5x base salary upon becoming President & Chief Executive Officer effective October 1, 2012.

47      ENBRIDGE INC.


Pay for performance

Performance is foundational to our executive compensation programs. The programs are designed to motivate management to achieve the reliable business model and superior returns that shareholders expect, with a focus on the longer term, while ensuring that the critical operational performance of the business is achieved. The Board of Directors reviews our short, medium and long-term business plans and the HRC Committee links the compensation programs to these timeframes. This ensures that management is focused on delivering value to shareholders not only in the short-term, but also continued performance over the longer term. The performance of our peer group is also considered.

Annual decision making process

The HRC Committee reviews and approves the compensation plans and pay levels for all the named executives. The HRC Committee reviews and recommends the compensation plans and pay level for the President & Chief Executive Officer to the Board. The table below shows how we make compensation decisions.

GRAPHIC

Components of executive compensation

Total executive compensation is made up of six components.


  Base salary   Short-term incentive   Medium-term
incentives
  Longer-term
incentives
  Retirement benefits   Other benefits  


  annual base pay

 

  annual cash bonus

 

  performance stock units

 

  incentive stock options
  performance stock options

 

  pension plans
  other retirement benefits

 

  savings plan
  perquisites
  medical, dental and insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

Base salary

Our base salaries offer fixed compensation for performing day-to-day responsibilities, while balancing the individual's role and competency, market conditions and issues of attraction and retention.

Short-term incentive

The short-term incentive plan is an annual bonus plan, paid out in cash. It is designed to motivate management to achieve corporate, business unit and individual objectives tied to executing our business strategy and to reward them according to their achievement for the year.

Each executive's target award and payout range reflect the level of responsibility associated with the role, as well as competitive practice, and is calculated as a percentage of base salary.

2013 Management information circular      48


It is critically important to ensure all of our executives are incented to achieve not only financial results but also operational results in the areas of safety and environmental performance, as well as customer and employee-based measures. For this reason, our short-term incentive awards are paid out based on performance against a combination of corporate, business unit and individual goals. To ensure alignment between each executive and the execution of the overall business strategy, all executives have a significant component of their incentive tied to operational business unit results as well as corporate measures. Operational results focus on the safe and reliable operation of our systems, the health and safety of our employee and contractor workforce and our environmental performance. For those executives who have primary responsibility for overall corporate performance, the corporate performance metrics are given more weight. Business unit performance metrics are given the most weight for executives with primary responsibility within an operating business unit.

Short-term incentive targets (as of December 31, 2012):

 
   
   
   
   
   
 

    Target award   Payout range   Performance measures/weightings  

 

 

(as a % of base salary)

 

Corporate

 

Business unit

 

Individual

 

Patrick D. Daniel   90%   0 – 180%   60%   20%   20%  
Al Monaco1   90%   0 – 180%   60%   20%   20%  
J. Richard Bird2   65%   0 – 130%   60%   20%   20%  
Stephen J. Wuori2   65%   0 – 130%   25%   50%   25%  
David T. Robottom   50%   0 – 100%   60%   20%   20%  
Janet Holder   50%   0 – 100%   25%   50%   25%  

1
Mr. Monaco's short-term incentive award target was increased from 50% of base earnings for January 1, 2012 to February 29, 2012 to 75% on March 1, 2012, to reflect his appointment as President, and further increased to 90% on October 1, 2012, to reflect his appointment as President & Chief Executive Officer. Mr. Monaco's short-term incentive award payment for 2012 was prorated accordingly.
2
Messrs. Bird and Wuori's short-term incentive award target increased from 50% to 65% as of March 1, 2012 to reflect increases in their portfolio of responsibilities. Messrs. Bird and Wuori's short-term award payments for 2012 were prorated accordingly.

We calculate the awards using an actual performance multiplier that ranges anywhere from 0 to 2, depending on whether the combination of goals has been met.

GRAPHIC

Use of discretion

The President & Chief Executive Officer can recommend an adjustment to the calculated short-term incentive award for his direct reports up or down when he feels it is appropriate, to reflect extraordinary events and other things not contemplated in the original measures or targets. The HRC Committee must approve the Chief Executive Officer's recommendations.

The HRC Committee can adjust the calculated short-term incentive award for the President & Chief Executive Officer up or down at its discretion. It can also change or waive the eligibility criteria, performance measures and the target and maximum award levels when it believes it is reasonable to do so, considering things like key performance indicators and the business environment in which the performance was achieved.

Medium and long-term incentives

Our medium and long-term incentives for executives include three plans: the performance stock unit plan, the performance stock option plan and the incentive stock option plan. These plans motivate executives to deliver strong performance and reward them for achieving earnings targets, maintaining top quartile price-to-earnings performance compared to our peers and appreciation in our share price over the longer term. Prior grants are not considered in determining future grants.

49      ENBRIDGE INC.


The three plans that apply to executives all have different terms, vesting conditions and performance criteria. This mitigates the risk associated with our compensation plans by ensuring our executives do not have an incentive to produce only short-term results for individual profit. This approach benefits shareholders and helps to maximize the retention value of the medium and long-term incentives granted to executives.


    Performance stock unit plan   Performance stock option plan   Incentive stock option plan  

Term   Three years   Eight years   Ten years  

Description   Phantom Enbridge shares with performance conditions that affect payout   Options to acquire Enbridge common shares once performance conditions met   Options to acquire Enbridge common shares  

Frequency   Granted every year   Granted approximately every five years   Granted every year  


Performance Conditions

 

Two performance conditions, weighted 50% each:
  Earnings per share relative to a target set at the start of the term; and
  Price to earnings performance relative to peers

 

2012 grant1:
  Three share price targets that must be met within a defined time period
  Performance vesting weighted at 40%/40%/20%

 

n/a

 

Vesting   Units mature in full after three years   Options vest 20% per year over five years, starting on the first anniversary of the grant date   Options vest at 25% per year over four years, starting on the first anniversary of the grant date  


Payout

 

Paid out in cash at the end of three years based on:
  the market value of an Enbridge share at the end of three years; and
  the performance conditions

 

Participant acquires Enbridge common shares at the exercise price defined at the time of grant (fair market value)

 

Participant acquires Enbridge common shares at the exercise price defined at the time of grant (fair market value)

 

1
The 2007 grant had two share price targets with performance vesting equally weighted at 50%/50%.

The table below shows the target amounts that we grant in medium and long-term incentives and the amount that each plan contributes to that total, in each case as a percentage of base salary.

Long-term incentive targets (as of December 31, 2012):


    Target medium and long-term
incentive grant
(as % of base salary)
  Amount each plan contributes
to total target grant
(as % of base salary)
 
   
        Performance
stock units
  Performance
stock options
  Incentive stock
options
 

President & Chief Executive Officer   330%   115%   100%   115%  

Executive Vice-President, Chief Financial Officer & Corporate Development   250%   87.5%   75%   87.5%  

President, Liquids Pipelines & Major Projects   250%   87.5%   75%   87.5%  

Executive Vice President & Chief Legal Officer   200%   70%   60%   70%  

Executive Vice-President, Western Access   200%   70%   60%   70%  

Medium and long-term incentive grants are determined as follows:

GRAPHIC

Performance stock units

Performance stock units give our executives the opportunity to earn up to two times the value of their units when they mature after three years, by achieving certain performance measures. We typically grant performance stock units annually, at the beginning of the year.

2013 Management information circular      50


We currently use two performance measures, each weighted at 50%:

Earnings per share (EPS): This measure represents a commitment to Enbridge shareholders to achieve earnings that meet or exceed the average industry growth rates projected at the time of grant.
Price-to-earnings (P/E) ratio: We use this measure because it is a strong reflection of how shareholders view our stock and our growth potential relative to our peers. For this measure, we compare ourselves against the following group of companies, chosen because they are all capital market competitors, have a similar risk profile and operate in a comparable sector.

  P/E ratio comparator group  

Ameren Corporation   OGE Energy Corp.  
Canadian Utilities Limited   ONEOK, Inc.  
Centerpoint Energy, Inc.   PG&E Corporation  
Emera Incorporated   Sempra Energy  
Fortis Inc.   Spectra Energy Corp.  
National Fuel Gas Company   TransAlta Corporation  
NiSource Inc.   TransCanada Corporation  

We calculate the payout at the end of the three year term using an actual performance multiplier that ranges from 0 to 2.0 depending on whether the performance conditions are met. The final Enbridge share price at the end of the term is the weighted average trading price of an Enbridge common share on the TSX or New York Stock Exchange for the last 20 days before the end of the term.

GRAPHIC

Performance stock options

Performance stock options are granted approximately once every five years and give executives the opportunity to buy Enbridge common shares at the exercise price specified at the time of the grant, as long as share price targets are met by a certain date. We set the targets before we grant the performance stock options, basing them on growth rates of adjusted earnings that represent exceptional (top quartile) performance and historical price-to-earnings ratio information for the industry.

2007 grant

In 2007, we granted performance stock options to the executive officers at the time. In 2008, we granted performance stock options to Mr. Monaco when he was appointed to the executive team.


Grant date   Number of performance
stock options granted1
  Exercise price1   Share price targets1   Must be exercised by  

August 15, 2007   4,690,0002   $18.29 per share   $25 and $27.50 by February 2014   August 15, 2015  

February 19, 2008   500,000   $20.21 per share   $25 and $27.50 by February 2014   August 15, 2015  

1
The number of performance stock options and the exercise price and share price targets have been adjusted to reflect the Enbridge stock split of May 2011.
2
This number represents the total performance stock options granted to the current named executive officers and to executive officers who have now retired.

51      ENBRIDGE INC.


The vesting of performance stock options is contingent on both a time vesting provision and the share price targets being met. Performance stock options time vest in equal annual installments over a five-year period; however, none actually vest until the share price performance hurdles are achieved. As of December 31, 2012, both share price targets have been met. Therefore 100% of the 2007 grant is exercisable and 80% of the 2008 grant is exercisable.

2012 grant

In August 2012, executive officers at the time, excluding Mr. Daniel, received a grant of performance stock options to cover the period of 2012 - 2016. The vesting of performance stock options is contingent on both a time vesting provision and the share price targets being met. Performance stock options time vest in equal annual installments over a five-year period; however, none actually vest until the share price performance hurdles are achieved. The performance criteria are such that, of the portion that has already time-vested, 40% will vest at $48.00; 80% at $53.00 and 100% at $58.00.

Details of this grant for the named executives are provided on page 61.


Grant date   Number of performance
stock options granted1
  Exercise price   Share price targets   Must be exercised by  

August 15, 2012   3,542,500   $39.86 per share   $48, $53 and $58 by February 2019   August 15, 2020  

1
This number represents the entire grant, of which 2,910,100 options were granted to named executive officers. None of the 2012 grant is exercisable as of December 31, 2012.

Incentive stock options

An incentive stock option gives a participant the option to buy one Enbridge common share at some point in the future at the exercise price defined at the time of grant.

We typically grant incentive stock options in February of each year to both Canadian and US members of senior management who are eligible to participate in the incentive stock option plan. Options granted to US employees can either be qualified or non-qualified, as defined by the US Internal Revenue Code.

Incentive stock options typically vest in equal installments over a four-year period. The maximum term of a stock option is ten years, but the term can be reduced if the executive leaves the company. Please see page 74 for further details.

The exercise price of an incentive stock option is the weighted average trading price of an Enbridge common share on the TSX for the last five trading days before the grant date. If the grant date is during a trading blackout period, we will adjust the grant date to no earlier than the sixth trading day after the trading blackout period ends. We do not backdate stock options.

We may grant incentive stock options to executives when they join the company, and would normally grant them on the executive's date of hire. If the hire date falls within a blackout period, the grant is delayed until after the end of the blackout period.

Stock options granted and outstanding as of March 5, 2013


Stock options outstanding    
  stock option plans 33,599,757  
  legacy incentive stock option plan (2002) 3,639,260  
  Total for all stock option plans (incentive stock options and performance stock options) 4.60% of total issued and outstanding shares  

Transferring and assigning stock options

The holder of an option cannot transfer or assign it other than by will, or as allowed by the laws of descent and distribution.

Share settled options

When an employee exercises an option they may receive Enbridge common shares having a fair market value equal to the "in-the-money" value of the option at the time it is exercised. In this case, the lesser number of Enbridge common shares issued and not the number of underlying Enbridge common shares reserved for issuance under the option will be deducted from the current option plan.

2013 Management information circular      52


Making changes to the stock option plans

The Board can make changes to the stock option plans, in whole or in part, as long as the regulators approve the changes; however shareholders must also approve the following changes:

changing the number of Enbridge shares that can be issued under the stock option plans;
removing or exceeding the insider participation limit;
reducing the grant price of an option;
cancelling or reissuing an option at a lower grant price;
extending the term of an option;
allowing someone who isn't a full time employee to participate in the stock option plans;
changing the rules related to transferring or assigning options; and
changing the amendment provisions of the stock option plans.

In 2012, the Board approved changes to the proration of performance stock options upon retirement to reflect their view that a grant of performance stock options relates to a five calendar year period even though the grant date occurs partway through the calendar year. These changes are permitted by the terms of the plan and do not require shareholder approval. The changes are:

Plan text before amendment Plan text after amendment  

  We prorate the performance stock options for the period of active employment in the five year period starting on the grant date.   We prorate the performance stock options for the period of active employment in the five year period starting January 1 of the year of the grant.  
  These prorated options can be exercised until the earlier of three years after retirement and the expiry of the term.   These prorated options can be exercised until the later of three years after retirement or 30 days after the date the share price targets must be met (or up to the date the options expire, whichever is earlier).  

Adjustments

The Board or the HRC Committee may make the following adjustments to the options or to the Enbridge shares that can be issued under the stock option plans upon the occurrence of certain events, including the payment of a stock dividend or a restructuring of our share capital:

increase or decrease the number or change the kind of shares reserved under the stock option plans or that can be issued when outstanding options are exercised;
increase or decrease the option grant price per Enbridge share; and
make changes to how installments of options vest and can be exercised.

The Board can also adjust the number of shares available under the stock option plans, the option price per Enbridge share and the option period, to allow our shareholder rights plan to continue to operate.

Please see page 74 for further information regarding our stock option plans, such as stock option plan restrictions and termination provisions.

Retirement benefits

As of January 1, 2000 (or the time of hire or promotion to a senior management position if after that date) the named executives joined the senior management pension plan, which is a non-contributory defined benefit plan that pays out an enhanced retirement income to all senior management employees. Before becoming members of this plan, certain named executives participated in a non-contributory defined benefit or defined contribution pension plan.

53      ENBRIDGE INC.



Defined benefit plan

The graphic below shows how we calculate the retirement benefit payable under the defined benefit pension plan applicable to the named executives:

GRAPHIC

Some key terms of the defined benefit plan

Retirement age: Executives can retire with an unreduced pension at age 60, or as early as age 55 if they have 30 years of service. If they have less than 30 years of service, they can still retire as early as age 55, but their retirement benefit is reduced by 3% per year before age 60;
Adjustment for inflation: Retirement benefits are indexed at 50% of the annual increase in the consumer price index;
Survivor benefits: the pension is payable for the life of the member. If the member is single at retirement, 15 years of pension payments are guaranteed. If the member is married at retirement and dies before their spouse, 60% of the pension will continue to be paid to the spouse for his/her lifetime; and
Flexibility: To attract and retain executives we can negotiate additional years of credited service or higher pension accruals, subject to approval by the HRC Committee.

Defined contribution plan

The defined contribution pension plan is a non-contributory pension plan. The level of contribution varies, depending on age and years of service.

Other retirement benefits

we prorate our executives' short-term incentive awards for the period of active employment in their last year;
we prorate their unvested performance stock units for the period of active employment during the term of the grant. The units continue to mature according to the terms of the performance stock unit plan;
we prorate their performance stock options for the period of active employment in the 5 year period starting January 1 of the year of grant. They can exercise these options until the later of three years after retirement or 30 days after the date by which share price targets must be met (or up to the date the option expires, whichever is earlier), as long as the share price targets are met; and
their unvested incentive stock options continue to vest according to the terms of our stock option plans. They can exercise these options up to three years after retirement, or up to the date the option expires (whichever is earlier).

Other benefits

Our savings plan, perquisites and benefits plans are key elements of our total compensation package for our named executives.

Savings plan

Our savings plan encourages share ownership by matching employee contributions of up to 2.5% of base salary (5% in the US) toward the purchase of Enbridge shares. The named executives participate in this plan along with all other employees.

2013 Management information circular      54



Perquisites

The named executives receive an annual perquisite allowance to offset expenses related to their position. This includes the cost of owning and operating a vehicle, parking and recreational clubs. These allowance levels are reviewed regularly for competitiveness. The named executives are also reimbursed for a portion of costs for personal financial planning.

 
   
   
 

    Perquisite
allowance
  Financial planning
reimbursement
 

Patrick D. Daniel   $49,500   50% up to $10,000  
Al Monaco1   $34,875   50% up to $10,000  
J. Richard Bird   $35,000   50% up to $5,000  
Stephen J. Wuori   $35,000   50% up to $5,000  
David T. Robottom   $30,000   50% up to $5,000  
Janet Holder   $35,000   50% up to $5,000  

1
Mr. Monaco's perquisite allowance was prorated for 2012 with an adjustment to his annual
allowance of $30,000 (from January to September) to $49,500 (from October to December).

Medical, dental and insurance benefits

Medical, dental and insurance benefits are available to meet the specific needs of individuals and their families. The named executives participate in the same plan as all other employees. The plans are structured to provide minimum basic coverage with the option of enhanced coverage at a level that is competitive and affordable.

The HRC Committee reviews our retirement and other benefits regularly. These benefits are a key element of a total compensation package and are designed to be competitive and reasonably meet the needs of executives in their current roles and when they retire from Enbridge.

In 2012 a complete review of our pension and benefit programs was undertaken to ensure they were meeting the needs of both the company and our employees. The review provided confirmation that our programs are designed with enough flexibility to meet the needs of our current and future workforce, are market competitive and are designed to be financially sustainable over time. While there are no program design changes required at this time, there is an opportunity to increase the level of communication and education that we provide to our employees with respect to these programs, and this will be an area of focus in 2013.

Compensation changes in 2013

The Committee reviews Enbridge's compensation philosophy and practices every year with assistance from Mercer, an independent compensation consultant, to ensure they are appropriate, competitive and continuing to meet our intended goals. There are no major compensation design or program changes approved by the HRC Committee for implementation in 2013. Based on the annual compensation benchmarking review for our senior executive positions conducted by Mercer in the fall of 2012, there will be some modest changes to 2013 short-term incentive targets for Mr. Robottom and Ms. Holder (from 50% to 60% of base salary) and from 90% to 100% of base salary for Mr. Monaco. Mr. Monaco's long-term incentive target has increased from 300% to 330% for 2013. These changes are made to maintain their competitive market positioning.

As part of our ongoing assessment we will continue to review our pay programs during the course of 2013. Any changes will be brought forward to the HRC Committee and the Board for decision. Any approved changes would come into effect in 2014.

2012 performance

Enbridge made good progress on many fronts in 2012 as we continued to build a solid and secure foundation for our future growth.

We achieved strong growth in earnings and cash flow in 2012, achieving our guidance range. Adjusted EPS rose 11% in 2012 to $1.62 per common share, building on an 11% increase in 2011 and a 13% increase in 2010.

55      ENBRIDGE INC.


Having entered 2012 with $12 billion in commercially secured growth projects in execution, we steadily added to that portfolio during the year and exited 2012 with a total of $26 billion in commercially secured growth projects over 2012 to 2016. These opportunities alone are expected to drive 10% plus average annual EPS growth through 2016.

In December 2012, we announced our 2013 guidance for adjusted earnings of $1.74 to $1.90 per share, the mid-point of the guidance range which represents an increase of approximately 12% over 2012. Also in December, based on our strong results and the Board's confidence in our long-term outlook, the Board approved an increase in the quarterly dividend of 12% effective March 1, 2013. Enbridge has increased its dividend by an average of 12% per year over the last ten years, and we have paid dividends for 60 years.

The majority of notable growth projects that we announced in 2012 are grouped within four Liquids Pipelines capital programs, which are designed to address the changing fundamentals of supply and market access. Combined, the four programs – US Gulf Coast Access; Eastern Access; Western Access; and Light Oil Market Access – effectively respond to the needs of our customers, as do the secured capital projects that we currently have underway to expand our Alberta regional infrastructure and our Bakken infrastructure in Saskatchewan and North Dakota.

In 2012, we took another step in the execution of our strategy to establish a strong position in the Canadian Midstream business when we entered into a midstream services relationship with Encana Corporation to develop gas gathering and compression facilities in the Peace River Arch region in northwest Alberta.

Also in 2012, we committed $600 million to expand Enbridge Gas Distribution Inc.'s natural gas distribution system in the Greater Toronto Area (GTA) to meet the demands of growth in the GTA, and we advanced our strategic objective to build a presence in the power transmission sector when we filed with joint venture partners for regulatory approval to acquire interests in Upper Canada Transmission Inc., which intends to bid for the opportunity to develop a new transmission line in northern Ontario.

We continued to grow our renewable and alternative energy portfolio in 2012 through the acquisition and start-up of the 50-MW Silver State North Solar Project in Nevada and the acquisition of a 50% interest in the 150-MW Massif de Sud Wind Project in Quebec. By year-end 2012, we had interests in about 1,365 MW – and owned almost 1,000 MW – of renewable and alternative energy projects. Our ownership interests in these projects provide enough energy to power approximately 275,000 homes.

With a growing slate of growth projects, Enbridge continued to demonstrate a strong competency in major project execution in 2012. With more than 20 major projects underway during the course of the year, the majority remained on schedule and on, or below, budget. We were also able to successfully bring onboard more than 3,700 employees in Canada and the US to effectively support our current and future growth.

In 2012, we also continued to make solid progress in further reinforcing safety and operational integrity across all of Enbridge's business units. We are doing this through our comprehensive operational risk management assessment and planning initiative, in which we are identifying and implementing further risk mitigation strategies to provide assurance that Enbridge will achieve its safety, integrity and environmental protection objectives. Our goal is to achieve top-quartile performance, along several safety and integrity dimensions. Executive oversight of this initiative is through our Operations and Integrity Committee, which is now the most critical committee in the company. We have redefined accountability, set performance targets and added technical staff. We have also established an Operational Risk Management Plan (ORM Plan), which is a roadmap of programs that are required to sustain an industry-leading position. We will obtain independent verification of our performance, and the results will be monitored by the Board.

Enbridge was recognized throughout 2012 for our Corporate Social Responsibility performance. For the fifth year in a row, Enbridge was included in the Global 100 Most Sustainable Corporations in the World ranking. We were also included on the 2012/2013 Dow Jones Sustainability World Index and the Dow Jones Sustainability North America Index and made a constituent of the 2012/2013 FTSE4Good Index. Enbridge was also included on the 2012 Carbon Disclosure Leadership Index and was named one of Canada's Greenest Employers and one of Canada's Top 100 Employers for 2013.

All of these developments had an impact on our share performance in 2012. Our common shares reached a 52-week trading high of $43.05 on the TSX on December 31st, before closing that day, and the year at $43.02 per common share.

2013 Management information circular      56



Enbridge's share price has outperformed the S&P/TSX Composite Index by 10% per year on average over the past 10 years. Since our inception as a publicly traded entity over 60 years ago, we have delivered an average annual total shareholder return of 15%, outperforming the TSX Composite Index by almost 6% over a similar timeframe.

Enbridge Performance Relative to S&P/TSX Composite Index
As at December 31, 2012
   

GRAPHIC

 

 

2012 pay decisions

The HRC Committee reviewed the performance, business environment and peer group comparisons and recommended the 2012 compensation for both the former and current President & Chief Executive Officers. The HRC Committee also reviewed and approved the recommendations of the former President & Chief Executive Officer for the remaining named executives.

Base salary

On April 1, 2012, Messrs. Daniel and Robottom received modest base salary increases to maintain their competitive position within the market. A larger increase was awarded to Ms. Holder to better align her positioning relative to the competitive market. In March 2012, the portfolios of responsibilities for Messrs. Bird and Wuori were expanded and their base salaries were adjusted accordingly to appropriately position them to the market. Mr. Monaco received a base salary increase of 52% in March 2012 when he was promoted to President, and he received an additional base salary increase of 25% when he was appointed President & Chief Executive Officer in October 2012.

Base salary

 
   
   
   
   
 

Base salary
as of December 31, 2012
  2012 base pay
($)
  % increase
from 2011
  2011 base pay
($)
  % increase
from 2010
 

Patrick D. Daniel1   1,330,000   4.0%   1,279,000   3.0%  

Al Monaco2   1,000,000   90.5%   525,000   5.0%  

J. Richard Bird3   725,000   25.7%   576,800   3.0%  

Stephen J. Wuori3   700,000   15.6%   605,480   3.5%  

David T. Robottom   460,830   4.0%   443,100   5.0%  

Janet Holder   449,400   7.0%   420,000   5.0%  

1
Mr. Daniel retired as Chief Executive Officer effective September 30, 2012. His 2012 base pay is shown as at that date.
2
Mr. Monaco's overall pay increase reflects his appointment as President on February 27, 2012 and President & Chief Executive Officer effective October 1, 2012, and the pay increases to $800,000 and $1,000,000 associated with those appointments.
3
Messrs. Bird and Wuori's pay increases reflect increases in their portfolio of responsibilities effective March 1, 2012.

Short-term incentive

Our short-term incentive is awarded based on performance against a combination of corporate, business unit and individual objectives that were established and approved at the beginning of 2012. In February 2013, the HRC Committee determined awards for the named executives under the short-term incentive plan of $4,121,680 including

57      ENBRIDGE INC.



$1,239,040 to the former President & Chief Executive Officer and $1,033,550 to the current President & Chief Executive Officer.

Corporate performance

Our 2012 corporate performance was measured by adjusted EPS. This is a metric that focuses on return to shareholders and is aligned with how investors and security analysts assess Enbridge's performance on an annual basis. Adjusted EPS is closely aligned with the company's targets and objectives and is consistent with information reported regularly to the investor community. It is a metric that is understandable from an employee perspective. The annual Board-approved budget establishes the target (1.0 multiplier) for this metric. The minimum (0) and maximum (2.0) multipliers are set using the low end and top end of the external guidance range that is publicly disclosed prior to the beginning of 2012. The adjusted EPS metric represents a significant component of our corporate named executives' short-term incentive award, ranging from 25%-60%.

Our 2012 adjusted EPS guidance range was $1.58 – $1.74 (with target equal to $1.66) as approved by the Board prior to the beginning of 2012. Actual performance was $1.62. Consistent with our financial reporting and public disclosure of results, adjusted earnings excludes the impact of non-recurring or non-operating items. Approximately $639 million of net adjustments were made to arrive at adjusted earnings of $1,249 million, including adjustments for mark-to-market gains/(losses) and tax on intercompany gains and sales.

The HRC Committee also considered our performance compared to other companies in our performance stock unit peer group and companies in the TSX60 and TSX Composite indices, as measured by dividend per share growth, total shareholder return and reward to risk over the past one, three, five and ten year periods. Enbridge's 2012 performance on all of the key performance indicators remained strong:

11% EPS growth;
15% dividend per share growth from 2011 (one of the highest in our peer group);
reward to risk ratio at the 93rd percentile of the peer group; and
total shareholder return in all periods (one year: 89th percentile; three year: 98th percentile; five year: 100th percentile; and 10 year: 100th percentile).

Use of discretion

During 2012, Management undertook, with Board of Director approval, a supplementary financing plan that included $2.8 billion of common equity, preferred equity and debt pre-funding actions that were not provided for in the original budget, prompted by the significant expansions to the company's five-year growth capital plan, which emerged over the course of the year.

Although these actions had an adverse impact on 2012 EPS, they were necessary and prudent steps to support the medium and long-term objectives of the company.

The HRC Committee approved an adjustment to the calculated EPS result utilized for the corporate performance multiplier for short-term incentive purposes only, to better align the short-incentive awards for employees with the positive near-term and long-term outcomes for shareholders and the company. Adjusting out the impact of the specific pre-funding actions noted above, resulted in an adjusted EPS of $1.676 (versus $1.62 per share) and a short-term corporate multiplier of 1.20 out of 2.0. This adjustment is reflected in the detailing of each named executive's compensation, beginning on page 62.

Business unit performance

Business unit performance is assessed relative to a scorecard of metrics and targets established by each business leader and their senior management teams at the start of the year. Scorecards are reviewed across the enterprise by the Executive Leadership Team. Scorecards include a range of financial and operational metrics that include personal, public and process safety, reliability of our systems and environmental performance. Customer service and satisfaction measures and employee metrics linked to employee engagement and our ability to attract and retain the talent that we need to execute on our business strategies, can also be included. Operational performance is a critically important focus for all employees, whether they are in direct operating roles or supporting functions. To reinforce that importance, all of the employees and executives have a significant element of their short-term incentive calculation tied to operational results. For the named executives who are primarily responsible for an operating business unit, 50% of their annual

2013 Management information circular      58



short-term incentive is tied to their business unit scorecard(s). For the named executives whose role is in a corporate function, 40% of their business unit component of their short-term incentive is an average of the non-financial operating metrics of the operating business units.

The following is an overview of the type of metrics and overall performance multipliers used for each named executive this year:

 
   
   
   
 

    Business unit   Metrics   Performance multiplier (0-2)  

Patrick D. Daniel     Business unit composite     non-financial operating measures for the combined enterprise   1.46  

Al Monaco     Business unit composite     non-financial operating measures for the combined enterprise   1.46  

J. Richard Bird     Corporate office     financial (corporate costs)
  full range of non-financial operating measures for the combined enterprise
  1.47  
          employee retention      
      Green Energy, International and Energy Marketing     financial and operating measures for the Green Energy, International and Energy Marketing business unit      

Stephen J. Wuori     Liquids Pipelines     financial and operating measures for the Liquids Pipelines and Major Projects business units   1.31  

David T. Robottom     Corporate office     financial (corporate costs)   1.46  
          full range of non-financial operating measures for the combined enterprise      
          employee retention      

Janet Holder     Western Access     financial measures related to the Western Access business unit   1.33  
          full range of operating measures for the Western Access business unit      

Individual performance – objective setting

In consultation with Mr. David A. Arledge, Chair, Board of Directors, and Ms. Catherine L. Williams, chair, HRC Committee, the former President & Chief Executive Officer's individual 2012 objectives were established at the start of the year, taking into consideration the company's financial and strategic priorities and Chief Executive Officer succession. The Chief Executive Officer and the President established individual objectives for the other members of the Executive Leadership Team for 2012 at the start of the year, basing them on strategic and operational priorities related to their portfolios and other factors. Upon transition to the role of President & Chief Executive Officer in October 2012, Mr. Monaco's individual objectives for the balance of the year were established in consultation with Mr. Arledge and Ms. Williams.

The discussion of each named executive's individual and business unit performances starts on page 62.

59      ENBRIDGE INC.



Short-term incentive calculations

The table below shows how we calculated each named executive's overall performance multiplier in 2012.

 
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
 

    A – Corporate performance   B – Business unit performance   C – Individual performance   Overall
performance
multiplier1
 

    Weight   ×   Corporate
multiplier
  =   Total
A
  Weight   ×   Business
Unit
Multiplier
  =   Total
B
  Weight   ×   Individual
Multiplier
  =   Total C   Total A+B+C  

Patrick D. Daniel   60%       1.20       0.72   20%       1.46       0.29   20%       1.85       0.37   1.38  

Al Monaco   60%       1.20       0.72   20%       1.46       0.29   20%       1.85       0.37   1.38  

J. Richard Bird   60%       1.20       0.72   20%       1.47       0.29   20%       1.80       0.36   1.37  

Stephen J. Wuori   25%       1.20       0.30   50%       1.31       0.66   25%       1.75       0.44   1.39  

David T. Robottom   60%       1.20       0.72   20%       1.46       0.29   20%       1.65       0.33   1.34  

Janet Holder   25%       1.20       0.30   50%       1.33       0.67   25%       1.60       0.40   1.37  

1
Actual results may vary from mathematical results using our formulas because of rounding.

We used the overall performance multiplier to calculate each named executive's short-term incentive as follows:

 
   
   
   
   
   
   
   
   
 

    Base salary
($)
  ×   Short-term
incentive
target
  ×   Overall
performance
multiplier
  =   Calculated
short-term incentive
award1
($)
  Actual
short-term incentive
award (rounded)2
($)
 

Patrick D. Daniel   1,330,000       90%       1.38       1,654,254   1,239,040  

Al Monaco   1,000,000       90%       1.38       1,243,800   1,033,550  

J. Richard Bird   725,000       65%       1.37       647,498   622,830  

Stephen J. Wuori   700,000       65%       1.39       633,588   610,310  

David T. Robottom   460,830       50%       1.34       309,217   309,220  

Janet Holder   449,400       50%       1.37       306,716   306,730  

1
Calculated results may vary from mathematical results due to proration of changes to short-term incentive targets throughout the year. Please see page 49 for more information.
2
Actual results may differ from calculated results due to rounding, and due to proration of changes to short-term incentive targets throughout the year. Please see page 49 for more information.

Medium and Long-term incentives

With the exception of performance stock options which are granted infrequently (usually every five years) in August, our medium and long-term incentives are granted early in the year. Medium and long-term incentives are generally targeted to the 50th percentile of our peer group, with the opportunity to realize this value to a greater or lesser degree based on how Enbridge performs in the future.

Effective January 1, 2012, we granted 128,800 performance stock units to the Enbridge named executives.

In March 2012, we granted 897,100 incentive stock options to the Enbridge named executives. This grant reflected the target delivery for this compensation program and the Black-Scholes value of the stock option at the time of grant. In September 2012, we granted 43,000 incentive stock options to Mr. Bird for retention purposes. Please see page 65 for more information.

In August 2012, we granted 2,910,100 (a 5-year grant covering the period of 2012 - 2016) performance stock options to the Enbridge named executives (excluding Mr. Daniel). This reflected the target delivery for this program and the Black-Scholes value of the stock option at the time of grant. The Black-Scholes option value was discounted by 11.4% to adjust for the additional risk associated with the share price performance hurdles.

Mr. Daniel's long-term incentive target was delivered utilizing incentive stock options and performance stock units to reach the overall long-term incentive target. Mr. Daniel's performance stock unit grant and incentive stock option grants were delivered at 165% of salary versus a target of 115% to reflect his not receiving a performance stock option grant due to his retirement.

2013 Management information circular      60


These grants resulted in annualized total direct compensation (base salary, short-term incentive, medium-term incentive and long-term incentives) being positioned, on average, between the 50th and 75th percentiles of the competitive market.

Performance stock units

The table below shows the performance stock units granted to the named executives in early 2012.

 
   
   
   
 

    A
Performance
stock units
granted